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(Bloomberg) — Generac Holdings Inc. made its name providing backup generators to homes whipsawed by hurricanes and ice storms. Now, it’s chasing a new market: data centers.
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The company is investing about $130 million in equipment and a factory to build larger backup generators for massive computing facilities running artificial intelligence applications, said Chief Executive Officer Aaron Jagdfeld. The company recently made some of its first international shipments of its bigger generators to data center customers, he said.
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“We’ve got a very robust pipeline of activity,” Jagdfeld said during an interview at Bloomberg’s headquarters in New York.
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Generac is moving into the data center market amid a surge of new power demand from AI and new factories. Demand hasn’t been this high in at least a generation. Some forecasts predict it’ll be grow at a rate not seen since the 1950s.
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Still, there’s no guarantee that level of demand will materialize. The advent of efficient models like DeepSeek AI threatens to taper anticipated energy demand. Microsoft Corp. has pulled back on some data center projects around the world as it takes a harder look at its plans. And projects are constrained.
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“It is a growing market but it is still in the early cycle,” Jagdfeld said. Building a large backup generator for a data center costs about $1 million, he added.
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Extreme weather also is creating opportunities for Generac. Last year, the company reported 1.5 billion hours of power outages across the US — the highest since 2010, when Generac began tracking outages.
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In addition, the increase in power demand likely will strain US grids and require more investments, driving up costs for utility customers who would consider generators or backup batteries, he added.
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