Orient: The AI data center enters the energy era, driving the demand for CHINA POWER equipment companies to go overseas.

Orient released a report stating that electricity is increasingly becoming a limiting factor for data center deployments in North America. Nvidia's investment in North American power companies is anticipated to lead regions with dense data center construction, such as Texas, to intensify efforts to restrict data center connectivity to the grid. Self-built data centers may become one of the main solutions for large data centers in North America in the future, potentially driving demand for Chinese power equipment companies to go abroad. Orient's main points are as follows: Nvidia holds a stake in the power company Lancium, directly owning equity in the power infrastructure that supports its hardware operations. Nvidia's investment is divided into two parts: an initial investment of $2 billion for a 20% stake in Lancium, with a potential for an additional $1 billion investment that could increase its stake to 30%. Lancium is part of the Blackstone Group and was founded in Houston, Texas, in 2018. It has secured over 4 GW of power contracts covering several major projects and is the power service provider for OpenAI and Oracle's AI campus "Stargate" in Texas. AI is transitioning from a "chip shortage" to a "power shortage." Nvidia's investment is a pure equity stake, not involving credit guarantees for data center construction and leasing. This represents Nvidia's direct action against power shortages, which could hinder the deployment of its next-generation Vera Rubin architecture designed for high-energy consumption locations. Texas has issued a moratorium on grid connections, potentially leading U.S. data centers toward "computation and electricity separation." On August 3, 2026, the Governor of Texas sent a formal letter to the state's Public Utility Commission and grid operator ERCOT, requesting a comprehensive verification and audit of all data center projects progressing through the interconnection process. All new interconnection approvals will be paused until the audit is completed. Any projects that fail verification will be unable to access Texas' grid system. According to data released by the grid operator, there are currently over 1,800 projects backlogged in Texas interconnection queue, with a total requested capacity of 474 GW, of which about 90% of the electricity demand comes directly from data centers. The audit directive does not directly limit projects that rely on on-site generation and are minimally dependent on the public grid, making it easier for projects with self-generation arrangements to pass verification. Optimism for North American self-built data centers to drive demand for power equipment. From the generation perspective, gas power generation, with its stable output and ability to peak load at any time, is more suited to meet the urgent demand for instantly controllable power from large data centers. From the transmission and distribution perspective, North American cloud providers self-built data centers will significantly increase the demand for primary power equipment such as transformers and switches, coupled with the shortage of supply for major transformers in North America, creating opportunities for Chinese power equipment companies. From the AIDC perspective, the increasing power density of data centers pressures updates to external power supply and distribution infrastructure, with solid-state transformers (SST) positioned as the ultimate solution for external power supply in data centers, likely to accelerate its industrialization process against the backdrop of "power shortages" in North America. Power has indeed become the most critical constraint on data center construction, and the worsening "power scarcity" in North America is seen as an opportunity for Chinese power equipment companies to expand abroad. Risk Warning Overseas CSP manufacturers' capital expenditures may fall short of expectations.