Aug 19 ( ) - Generac is best known for making backyard generators that rumble to life after power failures. But artificial intelligence is its new frontier. The Waukesha, Wisconsin-based company is spending $250 million by the end of next year to equip multiple factories to make beefed-up versions of its generators for data centers.
The order backlog for those machines already stands at $1.6 billion, and the company expects to add about 1,000 workers, a 10% increase in its headcount. "The question on everybody's mind is how long this build-out will go," Generac CEO Aaron Jagdfeld told in an interview. Other winners in the race to build new data centers include manufacturers of cooling systems, electrical transformers, and construction machinery.
And demand quickly filters out to all those companies' suppliers. Makers of everything from wire cables and pipes to cement and the massive prefab metal walls used on the buildings are feeling a tailwind from AI. Lucian Boldea, the CEO of Timken, an Ohio-based maker of highly engineered steel bearings, said data centers add another leg to the growth he's seen in orders from traditional customers such as defense and aerospace.
"Those data centers need massive buildings, roads, gas turbines — that all requires some of our products," he said. There are signs the boom is helping lift the larger manufacturing sector. U.S. factories added 5,000 jobs in July, according to the Labor Department, bringing the total for the year to 31,000.
That trend is a reversal from last year, when factories cut 113,000 jobs. To be sure, other forces are at work, such as a surge in construction of semiconductor plants. A separate measure from the Institute for Supply Management showed U.S. manufacturing activity hit the highest level in more than four years in July.
The Federal Reserve also reported on Tuesday that the manufacturing output index increased in July to its highest level in more than four years. Yet the mood among many producers remains gloomy, according to the ISM survey, highlighting the split between booming niches and many other parts of manufacturing. The division even shows up inside companies.
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