Cummins Rides Hyperscaler AI Boom with Record Data Center Sales

Hyperscalers, including Alphabet, Amazon, Meta Platforms, Microsoft, and Oracle, are planning to spend approximately $750 billion on capital expenditures in 2026, with a significant portion going towards AI infrastructure. Cummins is benefiting from this trend, as its Power Systems sales jumped 19% year over year in the second quarter due to strong demand for data center power equipment.

The company's growth in the data center market is being driven by sales of diesel and natural gas generator sets used for backup power, which are becoming increasingly necessary as AI racks consume more electricity. Traditional data center racks averaged around 12 kilowatts, while next-generation AI racks can reach 600 kilowatts or more.

Cummins is also starting to sell generators that don't simply wait around for an outage, but provide primary power as part of a behind-the-meter microgrid. This is a huge opportunity for the company, which can now potentially sell generators both as emergency backup and as a bridge or alternative to traditional grid power.