“We’re really going into what we believe is the early chapters of an investment supercycle in the US for electricity growth,” Scott Strazik, CEO of GE Vernova, told Barron’s during an interview at the World Economic Forum in Davos earlier this year. “If you take a step back, we probably haven’t seen an analogous period of time like this since 1945.”The AI build-out being undertaken at lightning speed is big business for companies like GE Vernova, which, along with Siemens Energy and Mitsubishi Heavy Industries, supply over 75 percent of the world’s gas turbines. GE Vernova’s equipment alone supplies 25 percent of the world’s electricity, and a staggering 55 percent in the United States. In the first quarter of this year, the company racked up $2.4 billion in sales related to orders for data centers, more than total sales for the previous year. Orders for gas turbines are booked out into 2030.In February, Siemens Energy announced it was investing $1 billion to expand its production of grid equipment in response to soaring demand for electrification, including restarting production of gas turbines at a plant in Charlotte, North Carolina, which had stopped producing them in 2020.Hitachi Energy invested $37 million to expand an existing facility in South Boston, Virginia, that produces large power transformers — another key piece of equipment in meeting the energy demands of the AI build-out. The company has invested over $1.5 billion into its transformer business alone. Like the gas turbine business, more than 50 percent of the large power transformer market is controlled by the same three companies, alongside Hitachi Energy and Toshiba Energy Systems.Even beyond these key suppliers, AI investment propped up an otherwise anemic economy, accounting for anywhere from half to 75 percent of GDP in the first quarter of this year.The windfall of profits for these manufacturers, however, reflects a severe supply crunch for these critical pieces of…
