S&P Global forecasts top tech firms to spend $750 billion on AI and data centers by 2026, boosting demand for backup power solutions.
Hyperscalers including Alphabet, Amazon, Meta, Microsoft, and Oracle are projected to spend $750 billion on capital expenditures in 2026, nearly 38% of their combined revenue. The surge is driven by AI infrastructure and data center expansion, increasing demand for backup power systems.
Cummins, a key supplier of diesel and natural gas generators, reported a 19% year-over-year jump in Power Systems sales during Q2. EBITDA margins for the segment rose to 24.5%, up from 22.8% in the prior year. The company attributes growth to power-hungry AI racks, which require significantly more electricity than traditional data center setups.
AI racks may consume up to 600 kilowatts, compared to 12 kilowatts for conventional racks, amplifying the need for robust backup power. Cummins expects sustained demand as AI adoption accelerates, positioning it as a beneficiary of the trend.