Hyperscalers Will Spend $750 Billion on AI This Year. Cummins Sells the Backup Power.
Cummins is best known for making engines for large trucks, but those engines can do other things, too.
Overview
At one point, Cummins (NYSE: CMI) seemed headed for the dustbin of history as the world moved toward electric vehicles. After all, the company's core business has long been making the large combustion engines that power trucks. But things have a habit of changing quickly, and those same engines are increasingly needed to do something else. You can thank the artificial intelligence (AI) infrastructure spending boom for making Cummins' technology increasingly relevant worldwide. Here's what you need to know.
Artificial intelligence has taken the world by storm, given how rapidly the technology seems to be advancing. At the end of the day, however, AI is just a fancy computer program. It needs reliable electricity to work. That's a problem given how rapidly companies are building out their AI platforms. It's estimated that up to $750 billion will be spent on AI infrastructure in 2026. A massive chunk of that will come from hyperscalers, which are creating giant AI data centers.
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Originally published at www.fool.com.