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ABB Confident in Data Center Growth Despite DeepSeek’s Energy-Efficient AI

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ABB CEO Morten Wierod expressed confidence in the continued growth of the data center market, despite concerns over the impact of DeepSeek’s low-energy AI models. Speaking on Thursday after ABB reported its fourth-quarter results, Wierod reassured investors that demand for the company’s electrification products remains strong.

DeepSeek, a Chinese AI startup offering a more energy-efficient alternative to U.S. rivals, caused a selloff in tech stocks earlier in the week after surpassing OpenAI’s ChatGPT in downloads on Apple’s App Store. The AI model’s ability to operate with significantly fewer chips raised fears that it could reduce demand for data center infrastructure, impacting suppliers like ABB. ABB’s stock dropped nearly 6% on Monday amid these concerns.

However, Wierod said discussions with major partners and customers indicated that capital expenditure plans for data centers remain unchanged. ABB has significantly benefited from data center expansion, with its orders in this sector growing by an average of 23% per year between 2019 and 2023. The pace accelerated in 2024, with data center-related revenue now contributing 15% to ABB’s electrification business, up from 12% in 2023 and 8% in 2022.

While Wierod declined to provide a forecast for 2025, he emphasized ABB’s strong positioning in the industry, particularly in China. He also highlighted the company’s role in improving data center energy efficiency, an increasingly important factor as AI computing demand surges. ABB’s motors and variable speed drives can reduce electricity consumption by up to 60%, while its uninterrupted power supply systems operate at 97.4% efficiency when converting electricity.

The company also expects to benefit from the $500 billion AI infrastructure investment announced last week by U.S. President Donald Trump, reinforcing the long-term demand for data center solutions.

“The need for data centers and AI will be very strong in the coming years,” Wierod said. “I have no doubt.”

 

Chipmaker NXP Secures €1 Billion Loan from EIB for European Projects

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NXP Semiconductors, a leading Netherlands-based chip manufacturer, announced on Wednesday that it has secured a €1 billion ($1.03 billion) loan from the European Investment Bank (EIB) to support its research and development projects across Europe. This loan is part of the EIB’s broader investment program launched last year, designed to strengthen Europe’s position in key strategic technologies such as semiconductors and artificial intelligence.

Focus Areas of the Loan

The loan, which carries a 4.75% interest rate and spans six years, will be allocated to various research and development projects in Austria, France, Germany, the Netherlands, and Romania. NXP will focus on advancing microchips, including power electronics devices, microprocessors, and microcontrollers. Additionally, the company will work on enhancing the energy efficiency of its products.

EIB’s Strategic Role

The EIB, as the European Union’s long-term lending institution, emphasized the critical importance of semiconductors for Europe’s digital and green transitions. EIB manager Robert de Groot highlighted that Europe must remain a key player in the global semiconductor value chains, noting that the sector is vital for the EU’s technological and economic future.

Recent Developments at NXP

In addition to securing the loan, NXP recently announced the acquisition of Austria-based TTTech Auto for $625 million, further expanding its capabilities in the automotive semiconductor market.

 

Synopsys and SiMa.ai Partner to Accelerate AI Chip Development for Automakers

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Synopsys, a leading provider of chip-design software, and SiMa.ai, a startup specializing in energy-efficient AI hardware and software for cars, have announced a strategic partnership aimed at advancing the development of artificial intelligence (AI) chips for the automotive industry.

Focus on Energy-Efficient AI for Automobiles

The collaboration is designed to support automakers and suppliers in developing AI-powered chips that can handle diverse functions within cars, particularly in electric vehicles (EVs). As EVs face competition for battery power between chips and drive systems, energy-efficient AI solutions are crucial. SiMa.ai has developed hardware and software that can handle a variety of AI tasks, such as computer vision for driver-assistance systems and voice assistants that listen for driver commands.

Partnership Benefits

The partnership will provide Synopsys users access to SiMa.ai’s intellectual property, enabling automakers to use advanced tools to simulate how chips and software will work together. This will help car manufacturers and suppliers identify the best chip-and-software combinations for their specific needs, improving performance and energy efficiency.

Industry Implications

SiMa.ai aims to integrate advanced AI technologies, such as voice assistants, into vehicles within the next three years. However, these AI technologies typically rely on power-hungry chips used in data centers, requiring adaptation to meet the energy demands of automobiles. SiMa.ai’s solutions are designed to be highly energy-efficient, fitting within the power and performance constraints of automotive applications.

Krishna Rangasayee, CEO of SiMa.ai, emphasized that the company’s technology is specifically built to meet the energy and performance needs of the automotive sector. The companies did not disclose the financial details of the agreement.