The meteoric rise of artificial intelligence (AI) technology has ushered in a robust growth cycle within the global data center marketAs businesses across various sectors increasingly embrace AI, the demand for advanced data processing and storage capabilities is reaching unprecedented levels, leading to significant capital investments and technological advancements.

According to a comprehensive report published by the Gaotong Team of Guolian Securities, the global data center market is projected to eclipse $90.4 billion by 2024. Notably, the Chinese market is expected to achieve a staggering CNY 304.8 billion, marking a remarkable year-on-year growth of 26.63%. This trend reflects not only the explosive growth of internet and tech giants in China but also the accelerating need for sophisticated computational power, driven primarily by the expansion of AI solutions.

In China, major tech companies have invested heavily in enhancing their AI capabilities, consequently fueling an exponential increase in the demand for intelligent computing power

Reports forecast that by 2027, the scale of intelligent computing power in China will reach 1,117 exaflops (EFLOPS). Alongside this remarkable growth, the total power requirement across Chinese data centers is anticipated to rise dramatically to 78.7 gigawatts (GW), highlighting the pressing need for robust infrastructure and energy solutions.

To ensure the seamless operation of data centers in this environment, there is an escalating demand for backup power solutions, including small modular reactors (SMRs), solid oxide fuel cells (SOFCs), high-capacity uninterruptible power supplies (UPS), and diesel generatorsThe substantial investments here indicate a proactive approach to managing energy resources and ensuring operational resilience amid growing power demands.

Moreover, with the expanding energy landscape, the requirement for electrical infrastructure components, such as switchgear and transformers, is expected to surge

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The entire power supply equipment industry stands to benefit from the developmental opportunities presented by AI, as businesses seek to optimize performance and efficiency.

The accelerating pace of AI model development has significantly impacted the scaling of intelligent computing power in China, with projections indicating a compound annual growth rate (CAGR) of 31% between 2024 and 2027. Such advancements are partially attributable to the performance characteristics of AI servers, which outperform traditional servers in power consumption and computational efficiency, thereby fostering a rapid rise in data center energy requirementsBy 2027, the total power capacity of Chinese data centers is projected to reach 78.7 GW.

As AI processors continue to deliver exceptional performance while consuming more power than their conventional counterparts, the necessity for liquid cooling technology becomes increasingly apparent

Take, for example, the Huawei Atlas 800 AI server and NVIDIA's NVL72 server; they exhibit maximum power consumptions of 5.6 kW and 120 kW, respectivelyLiquid cooling technology, known for its energy efficiency and exceptional heat dissipation capabilities, emerges as a viable solution to effectively decrease the Power Usage Effectiveness (PUE) metric, facilitating substantial energy savings in data centers.

In 2023, the market for liquid-cooled servers in China reached a substantial $1.55 billion, with projections suggesting it could grow to $7 billion by 2027. Within this market, liquid cooling pump manufacturers, including domestic firms like Zhongjin Environment and New World Pump Industry, are rapidly replacing foreign brandsThese advancements can be seen within leading data centers operated by companies such as Huawei and Tencent, who are increasingly adopting domestic liquid cooling solutions.

On the forefront of energy supply alternatives, small modular reactors (SMRs) have gained attention due to their location flexibility, shorter construction timelines, and comparatively lower investment requirements

Major Internet companies in the United States have established partnerships with nuclear power firms—AWS has aligned with Talen Energy, while Google collaborates with Kairos Power—reflecting a broader trend toward integrating sustainable energy solutions into data center designs.

According to Guolian Securities, the SMR market in China tied to data centers is expected to expand to CNY 59.1 billion by 2027, up from CNY 28 billion in 2024. Meanwhile, SOFCs are being recognized as an optimal solution for backup power due to their efficiency and environmentally friendly profileWith advancements in battery technology leading to declining costs, the SOFC market for data centers in China is projected to expand to CNY 52.3 billion by 2027 from CNY 11.9 billion in 2024.

The push for self-sufficiency in electricity supply equipment has become increasingly pronouncedThe uptick in data center construction is rapidly escalating the demand for high-capacity UPS systems, providing domestic brands considerable opportunities to capture market share

By 2027, the market for UPS systems specific to Chinese data centers is anticipated to reach CNY 25.3 billion, boasting a CAGR of 29.0%. Prominent players like Huawei, Kehua, and Kstar are progressively securing larger portions of the market as they innovate and adapt to emerging technology trends.

In the realm of backup power resources, the market for diesel generators is witnessing a distinct demand-supply gap, which may lead to a reshaping of the competitive landscapeBy 2027, the market space for diesel generators is projected to reach CNY 41.55 billion, although the high-end segment remains dominated by foreign brands like Cummins and CaterpillarNevertheless, domestic enterprises, such as Weichai Power, are making strides to establish a stronger presence in this vital energy sector.

Furthermore, as AI-driven servers amplify cabinet power requirements, the demand for dual power supply (2N) architectures is surging, resulting in a commensurate increase in the need for associated electrical equipment