A growing number of US industrial companies are pivoting towards the data centre market, hoping to ride the wave of artificial intelligence-driven demand as the sector sees an unprecedented influx of investment. According to a recent report by the Financial Times, companies such as Honeywell, Gates Industrial, and Generac are rapidly expanding into supplying critical infrastructure to the booming data centre industry.
With AI workloads growing at hyperspeed, tech titans like Amazon, Microsoft, Alphabet, and Meta—collectively referred to as “hyperscalers”—are driving demand for power-intensive and heat-sensitive infrastructure. Industrial players see this as a high-growth opportunity amid flagging activity in traditional markets.
“We’re seeing supersonic growth on the back of AI,” said Chris Snyder, an analyst at Morgan Stanley, highlighting how data centre customers are now willing to pay a premium for reliable and efficient hardware solutions.
Honeywell, a $153 billion North Carolina-based industrial conglomerate, has shifted significant focus to the data centre sector. Chief Executive Vimal Kapur told investors that the company is “focused on pivoting” into faster-growing verticals, with data centres topping the list. Over the past 18 months, Honeywell has expanded its hybrid cooling system offerings and reported double-digit growth in sales of its new hybrid controller for data centre applications.
Generac, the US’s largest home generator manufacturer, has also turned its attention to hyperscale clients as part of a strategic transformation aimed at countering a steep decline in its share price—down 75% from its 2021 peak. The company recently invested $130 million to expand production facilities specifically to meet large-scale demand from hyperscalers.
Ricardo Navarro, head of Generac’s data centre division, emphasized the sector’s resilience: “Even if the economy slows down on the traditional markets … [data centres are] almost isolated from economic downturns.”
Meanwhile, Colorado-based Gates Industrial—traditionally a supplier to the heavy-duty trucking industry—has begun designing pipes and pumps used to circulate liquid coolant around AI server racks. With Nvidia’s latest Blackwell chips requiring liquid cooling to operate at full potential, Gates sees a growing and sustainable niche. “A lot of [equipment] is mildly customised,” noted Mike Haen, VP of Global Product Line Management at Gates, underscoring the adaptability of its offerings for data centre use.
The strategic pivot comes at a time when the US manufacturing sector is contracting and trade-related uncertainty continues to cloud investment in more traditional industrial segments. The Institute for Supply Management’s manufacturing index has remained in contraction since March.
Yet, despite macroeconomic headwinds, data centre spending is defying gravity. Research firm Gartner forecasts more than $400 billion in global infrastructure investment for data centres in the current fiscal year, with hyperscalers accounting for over 75% of that total. Analysts expect continued growth into 2026.
The Financial Times also reports that other major industrial names, including Caterpillar, Cummins, and Johnson Controls, are also aggressively moving into the space, betting that demand for backup power, climate control, and cooling systems will remain robust as AI continues its relentless expansion.
However, analysts caution that the window of opportunity may be narrowing. While servicing and maintenance may provide a long revenue tail, firms that have yet to enter the sector risk missing out as investment levels eventually normalize.
