by Stephen Nellis
The French group Schneider Electric
SCHN.PA said Thursday it will supply equipment worth $3 billion to Texas-based Compass Datacenters, amid high demand for data centers for artificial intelligence (AI) services.
Compass, which was bought by Brookfield Infrastructure Partners BIP.N earlier this year, has seen demand increase as technology companies demand data center space to house the brains behind similar applications at ChatGPT.
Schneider already supplies Compass Datacenters with much of the electrical equipment that connects these data centers to the network.
Earlier this year, the two companies began working together on a joint facility in Texas, where they will design and build electrical equipment for so-called modular data centers, which can be built quickly and modified later depending on changing needs.
The $3 billion supply deal between Schneider and Compass will run for five years.
What is driving companies to integrate supply chain operations is the change in data centers brought by AI, which can use up to 10 times more electricity compared to traditional IT, a Aamir Paul, president of Schneider Electric North America, told Reuters.
“If you want to build a data center that uses a lot more energy, you have to think differently right down to the actual design of the data center and the facility,” Paul said.
Compass Datacenters aims to reduce the time and cost of building a data center of the same quality, whether built in Italy or Texas, Chris Crosby, the company’s chief executive, told Reuters.
“It’s very different from the way the design and construction industry thinks,” Mr Crosby said. We really tried to bring that discipline and rigor of manufacturing into this world.”