Schneider, Siemens race to rewire for AI's $220B power buildout

Bloomberg reported on July 3 that next-generation AI factories are forcing companies like Schneider Electric and Siemens to redesign their portfolios for a data center equipment market that RBC Europe analyst Mark Fielding projects will reach $220 billion a year within five years, up from $60 billion in 2024. That is the kind of jump that stops being a chip story and starts being an electrical-engineering one.

The physical driver is straightforward. Nvidia's Rubin GPU and rack system, coming out later this year, will eventually need around 300kW to run, and the industry is bracing for successor chips that bring racks closer to 1 megawatt, enough to power roughly 750 US homes on average. That is not a level you serve gracefully with the AC distribution, transformers, and uninterruptible power supplies that have been the profit engine for the incumbents. It is a level that pushes vendors toward 800-volt DC, where per Bloomberg's reporting a single cable can transmit nearly three times the power of a conventional AC one.

The interim answer is the sidecar, a DC unit bolted onto an existing AC data center. Siemens' Ciaran Flanagan told Bloomberg that today's data centers are predominantly AC and will remain operational for 20 to 30 years, so ripping and replacing is not on the table. Schneider's Frederic Godemel, executive vice president of energy management, acknowledged that solid-state transformers and the wider supply chain are not fully there yet, but told the reporters, "We will fix it."

The honest caveat is that this is a long ramp. The reporting cites a forecast that 800 VDC will only reach around 20% of data centers by 2030, and meaningful earnings impact is unlikely before then. Traditional transformer and UPS lines that Bloomberg says face declining demand are still the base of the incumbents' revenue today, and the piece does not break out which specific hyperscalers or contracts anchor the sidecar pipeline.

What it does tell you is where to watch. The upside accrues to whoever ships certified 800-VDC gear before Rubin volumes land, and to the cooling and distribution specialists that a 300kW-plus cabinet drags along with it — the names Bloomberg groups alongside Nvidia here include Flex and Vertiv.