By Stephen Nellis
Nov 9 (Reuters) - France's Schneider Electric SCHN.PA on Thursday said it will supply $3 billion worth of equipment to Texas-based Compass Datacenters, amid a surge in demand for data centers to power artificial intelligence (AI) services.
Compass, which was purchased by Brookfield Infrastructure Partners BIP.N earlier this year, has seen an uptick in demand as technology companies demand space in data centers to house the brains behind applications similar to ChatGPT.
Schneider already supplies Compass Datacenters with much of the electrical equipment that helps connect those data centers to the grid.
Earlier this year, the two companies started working together on a joint facility in Texas, where they will design and build electrical gear for what are called modular data centers, which can be built quickly and modified later as change.
Schneider's $3 billion supply agreement with Compass will span five years.
What is driving the companies to integrate supply chain operations is the change in data centers being brought by AI, which can use up to 10 times more electricity compared to traditional computing, Aamir Paul, president for Schneider Electric North America, told Reuters.
"If you're going to build a data center that is much more energy intensive, you have to think differently down to the actual design of the data center and the facility itself," Paul said.
Compass Datacenters aims to reduce the time and cost to construct a data center that is the exact same quality whether it is built in Italy or Texas, CEO Chris Crosby told Reuters.
"It's quite different than the how the design and construction industry thinks," Crosby said. We've really tried to bring that manufacturing discipline and rigor into this world."
(Reporting by Stephen Nellis in San Francisco; Editing by Varun H K)