Siemens AG Targets AI Data Center Boom in India with Sustainable Solutions

Siemens AG looks to ride AI data centre wave

German engineering giant Siemens AG is aiming to tap the AI data centres opportunity in India that has created a need for sustainable electrification and cooling solutions, a senior executive said. "Data centres are growing significantly, double-digit around the world," Peter Koerte, member of the managing board, Chief Technology Officer, and Chief Strategy Officer at Siemens AG told ET. "The good news for us is being an outfitter of data centres, all the electrification comes pretty much from two or three companies. And so, investors would argue that we and Schneider are the ones that stand to benefit the most." Globally, data centre revenues for the six biggest electrical firms including ABB Ltd, Siemens AG, Legrand SA and Schneider Electric SE have reached 20 billion euros ($22.2 billion) last year, double from what they were five years earlier. Siemens had built its third Centre of Competence for Data Centres in Chennai this year, which will serve the APAC region, estimated to invest $75 billion in data centres by 2025, surpassing the US as the highest investing region globally. Koerte explained that the only way to decarbonise our economies amid the high energy demands of AI is to utilise renewable sources like wind and solar. However, from data centres' perspective, companies are now exploring nuclear fission and fusion options which could be more reliable than renewables, he said. Siemens expects India to be among the top three or four markets for the company over the next three years, overtaking Germany and France, At present India is its fifth-largest market and contributes 3.5-4% of the firm's revenue, senior executives of the company told media persons on the sidelines of Siemens Innovation Day event in Mumbai on Tuesday. Siemens has 32 factories in India employing 32,000 of its 2.4 lakh global workforce. It plans to expand its manufacturing base by investing part of 100 million euros capex it announced earlier this year. When asked about Siemens global vision for industrial AI, Koerte said the biggest challenge at the moment is how to monetize it. "How do you charge for it? Most of our customers, in the industrial world, don't budget that way. Therefore, tell me the company that makes a lot of money today out of Gen AI. I only know one. That's called Microsoft," Koerte said. "It's a marriage in heaven with OpenAI and Microsoft, which together can get the Copilot embedded into Word, Excel and so on. And so, now you pay for the Microsoft 365 license." "So, in our case, it means very often augmenting existing software or existing hardware that we sell instead of selling standalone Gen AI products," he said.

Siemens AG Aims to Capitalise on India's AI Data Center Boom: Report

Siemens is focusing on sustainable electrification and cooling solutions for AI-driven data centers in India. Siemens AG is reportedly looking to capitalise on the AI data centres opportunity in India, which has created a demand for sustainable electrification and cooling solutions. The German engineering company sees India as a critical growth region, with the country expected to be among Siemens' top three or four markets globally within the next three years, surpassing Germany and France, ET reported, citing a senior executive. Also Read: Nxtra by Airtel Deploys AI to Enhance Data Centre Operations India, currently Siemens' fifth-largest market, contributes 3.5-4 percent of its revenue, the report said, citing senior executives who briefed the media on the sidelines of Siemens Innovation Day event in Mumbai on Tuesday. "Data centres are growing significantly, double-digit around the world," said Peter Koerte, member of the managing board, Chief Technology Officer, and Chief Strategy Officer at Siemens AG, according to the report. "The good news for us is being an outfitter of data centres, all the electrification comes pretty much from two or three companies. And so, investors would argue that we and Schneider are the ones that stand to benefit the most." Globally, the six largest electrical firms, including ABB Ltd, Siemens AG, Legrand SA and Schneider Electric SE, reached EUR 20 billion (USD 22.2 billion) in data center revenue last year, marking a twofold increase over five years. In 2024, Siemens opened its third Centre of Competence for Data Centres in Chennai, aimed at supporting the APAC region, which is projected to invest USD 75 billion in data centers by 2025, surpassing the US as the highest-investing region globally. Also Read: CtrlS Datacenters to Offer Direct Access to Oracle Cloud and AI Services According to the report, Koerte explained that the only way to decarbonise our economies amid the high energy demands of AI is to utilise renewable sources like wind and solar. However, from data centres' perspective, companies are now exploring nuclear fission and fusion options, which could be more reliable than renewables. Siemens also plans to expand its manufacturing footprint in India, which already includes 32 factories and a workforce of 32,000 of its 2.4 lakh global employees, with part of a EUR 100 million capex allocated for this growth. Also Read: Microsoft Says AI Demand Continues to Exceed Its Available Capacity When asked about Siemens' global vision for industrial AI, Koerte reportedly said the biggest challenge at the moment is how to monetise it. "How do you charge for it? Most of our customers, in the industrial world, don't budget that way. Therefore, tell me the company that makes a lot of money today out of Gen AI. I only know one. That's called Microsoft," Koerte reportedly said. "It's a marriage in heaven with OpenAI and Microsoft, which together can get the Copilot embedded into Word, Excel and so on. And so, now you pay for the Microsoft 365 license." "So, in our case, it means very often augmenting existing software or existing hardware that we sell instead of selling standalone Gen AI products," he added, according to the report.