Increasing investment in AI power demand! GE Vernova spent $5.3 billion to acquire the remaining 50% stake in Prolec

According to Zhitong Finance APP, American power giant GE Vernova (GEV.US), focused on power systems and clean energy, has agreed to acquire the remaining shares of transformer manufacturer Prolec GE that it does not already own, as the current AI boom is driving a surge in demand for products and services in the power industry. GE Vernova will pay approximately $5.3 billion to acquire the remaining 50% stake in Prolec from its joint venture partner, Mexico's Signus Group. Scott Strazik, CEO of GE Vernova, stated in an interview: "This move aligns closely with many of our current priorities." He noted that full ownership of Prolec means GE Vernova can increase its investments in North America and the grid equipment sector, and expand its service scope for hyperscale enterprises building data centers. "We are continuously deepening our close ties with data centers every quarter." As the power consumption of data centers required to achieve the AI goals of major tech companies surges, coupled with the ongoing deepening of economic electrification, global electricity demand is rapidly increasing. Data shows that by 2035, data centers are expected to consume about 4.4% of global electricity. The scale of their energy consumption is so large that it ranks fourth in the "country list" of electricity consumption, behind China, the United States, and India. GE Vernova, which was spun off from General Electric last year, has become a major beneficiary of this wave of power demand, largely due to the strong performance of its gas turbine business. The company's stock price has risen by about 78% this year. In September, the company agreed to sell its industrial software business Proficy to alternative asset management firm TPG for $600 million, planning to reinvest the proceeds into its core business. Prolec is a supplier of grid equipment, producing transformers covering most rated power and voltage levels. It has seven production bases worldwide (five of which are located in the United States) and employs about 10,000 people. The joint venture was originally established by General Electric and Mexico's Signus Group in 1995. Strazik added: "We are seeing a significant increase in demand for power equipment, which is our fastest-growing business." He revealed that Signus was originally the controlling party of Prolec, and this transaction will give GE Vernova more decision-making power in product development. According to company information, the non-compete clause included in the joint venture agreement had previously restricted GE Vernova's ability to sell transformers in North America, and this restriction will be lifted upon completion of the transaction