AI Data Centers are Rewriting the Rules for Industrial Manufacturers

AI data centers have become a powerful demand driver for manufacturers. In the U.S. alone, around 2,800 data centers are currently being planned, according to American Edge, more than doubling the country’s data center base. 

Accenture analysis shows sustained growth across several equipment categories as a result of data center growth.

• Power generation equipment. The gas turbines and power generators market is projected to grow approximately 9% annually. At Caterpillar, power and energy sales increased in large reciprocating engines, primarily for data center applications. Cummins also reported higher revenues in North America, driven by increased demand for power generation products, particularly from the data center market. 
• Power transmission, supply and control components. The market for switches, control units and converters is forecast to grow by up to 17% annually over the next 10 years. Eaton, for example, reported that the 12-month rolling average of orders in its Electrical Americas segment was up 16% in the fourth quarter of 2025, driven by data center momentum. 
• Cooling solutions. This sector is expected to grow even faster, at approximately 37% per year. At Vertiv, order momentum accelerated significantly, with fourth-quarter organic orders up approximately 252% compared to the previous year’s fourth quarter, with hyperscale and colocation data centers being one of the main drivers. 

Where data center demand creates challenges

The surge in data center projects creates challenges for manufacturers of power generation equipment, power transmission components and cooling solutions, particularly in these four areas:

• Capacity expansion without overextension. Over the last five years, major players have announced investments of nearly $4.5 billion in manufacturing capacity expansion in the U.S. However, the potential “boom-bust-boom” nature of these cycles may leave companies saddled with excess physical capacity in a few years. Manufacturers should use the windfall from the data center boom to invest further in automating existing sites. Not only will this drive production efficiency and help meet surging demand, but automation is also far more transferable than physical plants. 

So far, companies have focused on traditional workflow optimization. While much can be gained from this approach, now is also the time to deploy and scale advanced robotics and autonomous operations powered by physical AI and agentic AI. 

• Modularization changes how equipment is built. To accelerate data center development, hyperscalers are moving away from traditional bespoke construction toward a more industrialized approach, as outlined in Accenture’s Data Center Trends 2026 report. This shift does not impact only the construction industry. Hyperscalers will increasingly expect manufacturers to deliver not just parts and devices, but fully industrialized modules. Think platform-based design, where prefabricated and pre-tested elements and modules serve as the building blocks of a scheme’s design. On-site delivery becomes largely a matter of assembly, requiring fewer labor resources.  Examples include a multi-year agreement Schneider Electric signed with Compass Datacenters in 2023, extending their existing relationship to manufacture and deliver prefabricated modular data center solutions. In August 2025, Vertiv launched One Core, a single, factory-assembled system integrating power, thermal and IT infrastructure technologies. 

• Cooling innovation demands collaboration. Higher processing capacity and denser racks generate far more heat than traditional cloud data centers. Hyperscalers and chip manufacturers are working intensively to develop new solutions. Manufacturers of cooling systems must collaborate closer than ever with data center developers to determine future-proof cooling systems for each individual facility. In the near term, these systems will use a mix of air cooling and various forms of liquid cooling. Perimeter air cooling remains the prevalent approach, but cold-plate cooling (where a liquid coolant circulates through thermally conductive metal plates) is becoming the norm for AI data centers. Immersion cooling (where heat is removed by immersing hardware in a thermally conductive but electrically non-conductive liquid) was rarely used 18 months ago. However, there are signs that it will be deployed more widely in 2026. Evaporative cooling, which uses vast amounts of water, will be phased out. 

• Competition in electrical components raises the stakes. Competition in the electrical components market is fierce. Manufacturers in the U.S. and other Western countries are under growing pressure from companies in Asia, particularly in highly commoditized categories such as low-voltage circuit breakers. To persist in this market, Western brands must consistently deliver the highest-quality, long-lasting and extremely durable products. Moreover, they must ensure customers can rely on uninterrupted, on-time supply in the extremely fast-moving data center market. This requires further strengthening the resilience of their own supply chains, for example, for copper, where S&P Global projects a widening supply gap due to accelerating electrification. 

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