CITIC Construction Investment: AIDC development drives demand for supporting equipment; focus on gas turbines, engines, and other industry chains

CITIC Construction Investment Securities Research Report points out that AIDC construction is entering a period of rapid growth. It is estimated that from 2025 to 2028, the U.S. AI demand will require an increase in power capacity with a CAGR of about 55%. The total demand over the next three years will exceed 150 GW, bringing significant electricity needs and opportunities for supporting equipment. Currently, North America faces prominent power shortages, making self-built power sources a major trend. Gas turbines, with their quick response, high power adaptability, lower generation costs, and high reliability, are the preferred primary power sources for AIDC. Globally, leading overseas gas turbine manufacturers already have order backlogs far exceeding their current capacity. These giants are pushing ahead with capacity expansion plans, but overseas upstream supply chain expansion remains cautious, intensifying industry chain shortages. Domestic gas turbine complete units and core component industries are poised to benefit. Additionally, attention is given to solutions for filling gaps in aviation and marine fuel conversions.

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CITIC Construction Investment: AIDC development drives demand for supporting equipment; focus on gas turbines, engines, and related industries

AIDC construction enters a period of rapid growth. It is estimated that from 2025 to 2028, the U.S. AI demand will require an increase in power capacity with a CAGR of about 55%. The total demand over the next three years will exceed 150 GW, creating substantial electricity needs and opportunities for supporting equipment. Currently, North America faces significant power shortages, making self-built power sources a major trend. Gas turbines, with their quick response, high power adaptability, lower generation costs, and high reliability, are the preferred primary power sources for AIDC. Globally, leading overseas gas turbine manufacturers already have order backlogs far exceeding their current capacity. These giants are advancing capacity expansion plans, but overseas upstream supply chain expansion remains cautious, with ongoing industry chain shortages. Domestic manufacturers of complete gas turbine units and core components are set to benefit. Additionally, solutions for filling gaps in aviation and marine fuel conversions are also being focused on.

Demand Side: AIDC construction is entering a rapid growth phase, creating opportunities for supporting equipment. The parameters of AI large models continue to increase, demanding higher computing power, which drives AIDC construction into a high-growth trajectory. Investment in AIDC mainly includes IT equipment, civil engineering, and electromechanical infrastructure, with infrastructure accounting for about 15%-20% of the value. Within this, power supply and distribution systems account for 50%-60%. The growth in computing power demand will accelerate the market for supporting equipment. Based on chip shipment estimates from major manufacturers, the power capacity demand driven by North American AI from 2025 to 2028 is projected at 19, 32, 49, and 71 GW respectively, with a CAGR of about 55%. The total demand from 2026 to 2028 will exceed 150 GW.

Supply Side: North America’s power shortages are becoming more apparent, prompting AI giants to accelerate self-built power projects. North America is the main region for AIDC development, with large electricity demands driven by AIDC needs. Currently, power shortages are prominent, with the retirement of thermal power units either steady or accelerating, and delays in grid connection of new capacity. Self-built power sources are becoming a major trend. Gas turbines, with their quick response, high power adaptability, lower costs, and high reliability, are the preferred primary power sources for AIDC. Companies like xAI, Google, and Meta are ordering gas turbines to build AIDC power supplies.

Domestic gas turbine complete units and core component industries are poised for opportunities. The global gas turbine market currently shows a significant mismatch between supply and demand. Leading companies’ order backlogs already far exceed their current capacity. To meet strong order demands and ensure delivery, global gas turbine giants are expanding capacity, but overseas upstream supply chain expansion remains cautious, exacerbating industry chain shortages. Domestic component companies are benefiting from spillover demand, having already supplied overseas clients. Key components include blades, castings and forgings, and heat recovery steam generators (HRSG). Moreover, China’s gas turbine industry is at a critical transition from “long-term reliance on imports” to “independent development and commercialization,” with prospects for going international. Due to the ongoing supply-demand gap, equipment demand spillover, and the need for gap-filling solutions in aviation and marine fuel conversions, attention is also on these areas. The key components, such as blades, are in tight supply, with heavy-duty gas turbines experiencing delivery delays of over five years. Under the challenge of delayed heavy-duty gas turbine deliveries, multiple lightweight gas turbines connected in parallel are considered as solutions to fill power gaps. Trends like aviation fuel conversion and marine diesel mid-speed engine conversions are also being watched.