ABB CEO ‘very confident’ of demand for data centers powering AI

In a significant vote of confidence for the artificial intelligence sector, ABB CEO Morten Wierod has expressed strong optimism about sustained demand for data center infrastructure to support AI growth. The Swiss engineering giant is positioning itself at the forefront of what industry leaders describe as a multi-trillion dollar investment wave in computational power.

According to recent statements from ABB’s leadership, the company is experiencing double-digit percentage growth in electrification product orders specifically tied to data centers built for AI and cloud computing applications. This surge comes as technology companies race to build the computational infrastructure needed to support increasingly sophisticated AI models and applications.

Sustained Growth Beyond Initial AI Boom

Wierod dismissed concerns about an AI bubble forming in the infrastructure sector, instead pointing to concrete constraints that validate the genuine nature of current demand. “I don’t think there is a bubble, but we do see some constraints in terms of construction capacity not keeping up with all the new investments,” the CEO noted during recent discussions with financial media.

The scale of investment required is staggering, with Wierod emphasizing that “we are talking about trillions in investment” that will require several years to fully implement due to limitations in available construction resources and skilled personnel. This long implementation timeline suggests sustained demand for ABB’s electrification solutions well into the future.

Strategic Partnerships for Next-Generation Infrastructure

ABB’s confidence in the AI-driven data center market is backed by strategic moves, including a recently announced partnership with chip manufacturer NVIDIA. The collaboration aims to develop specialized electrification products tailored for next-generation data center chips, representing a long-term investment in the evolving technological landscape.

“That’s not for 2025 or 2026, it’s more of a long term investment,” Wierod explained. “It’s very important to be part of the future technology developments.” This forward-looking approach aligns with broader industry trends, as evidenced by recent positive market movements following strong results from semiconductor manufacturers like TSMC.

Dual Market Opportunities: New Builds and Retrofits

While much attention focuses on new data center construction, ABB identifies significant opportunities in upgrading existing facilities. Many older, smaller data centers require substantial upgrades to handle increased power demands of modern AI workloads.

“For some of the older, smaller size data centres, you will need to upgrade the racks with equipment, and you also need to have more power coming in,” Wierod noted, describing retrofitting as “a big opportunity” for the company’s growth strategy.

Business Impact and Market Position

The data center segment now represents approximately 7% of ABB’s total revenue, up from 6% in the previous year. The company provides critical electrification systems including medium and low voltage switchgear and uninterruptible power solutions that ensure continuous operation of AI servers.

This growth trajectory reflects broader industry momentum, with increasing investor confidence in technology infrastructure companies as AI adoption accelerates across multiple sectors. The convergence of semiconductor innovation, power management technology, and computational demand creates a favorable environment for companies like ABB that sit at the intersection of these trends.

Long-Term Vision in Early-Stage AI Development

Wierod’s confidence stems from his assessment that artificial intelligence remains in its early developmental stages. “AI is only in its early stages, leaving room for growth in data center demand,” he observed, noting that the market continues to attract new entrants alongside established technology giants.

This perspective suggests that current infrastructure investments represent just the beginning of a much larger build-out cycle as AI applications become more sophisticated and computationally intensive. The ongoing competition between technology companies to develop more powerful AI systems ensures continued demand for the advanced electrification solutions that ABB specializes in providing.