A gas engine manufacturing company completed a massive $2.43 billion stock market launch and is preparing to start trading on the Nasdaq exchange following overwhelming investor demand.
Wall Street investors are increasingly backing companies that support artificial intelligence infrastructure, expanding their focus beyond computer chip manufacturers to include the supporting businesses that provide essential equipment for the technology sector’s growth.
The manufacturer sits at the center of the artificial intelligence expansion, tackling the technology’s enormous power needs by supplying energy generation systems to data centers.
“The market backdrop is very supportive for companies building the physical backbone of AI, with investors rewarding firms that can show revenue and a link to data-center demand – including power, cooling, grid equipment, renewables and so forth,” IPOX Research Associate Lukas Muehlbauer said.
“This strong interest also comes from the fact that it is not a speculative early-stage ‘AI story’ but has an established history with GE heritage.”
U.S. buyout firm Advent International carved out General Electric’s distributed power business in a $3.25 billion deal to form Innio in 2018.
The Munich, Germany-based company’s main shareholder, AI Alpine, co-owned by funds managed by Advent and the Abu Dhabi Investment Authority, sold 90 million shares at the highest price in the marketed range of $24 to $27 each.
The manufacturer produces gas engines under the Jenbacher and Waukesha brands for data centers, microgrids, grid stabilization, industrial energy, and gas compression.
One of the company’s key customers is the German city of Kiel, where it provides power and heat to thousands of people.
Orders for the company’s gas engines have skyrocketed as data center operators increasingly look for backup power systems to minimize dependence on grid limitations.
Artificial intelligence’s power demands are enormous, with generative AI consuming significantly more electricity than conventional computing operations.
The company’s data center equipment orders jumped to $1 billion as of March 31 from $309 million a year earlier. It has secured major contracts, including an agreement for a multi-gigawatt power plant.
“The key for the company will be to show that the growth in equipment orders can continue and turn into long-term service revenue. For data centers, reliability is important and gas engines need maintenance over many years,” Muehlbauer said.
