LS Electric Wins Rp3.5 Trillion Contract, Electricity for AI Data Center Getting Hotter

LS Electric Co. Chairman Koo Ja-kyun and several company officials pose for a photo together at MCM Engineering II, an American electrical engineering company, in Utah. (Yonhap)

JAKARTA - The business of artificial intelligence or AI does not only make technology companies hunt for chips and servers. The electricity demand also jumped. This is where LS Electric comes in.

As reported by Yonhap, Thursday, April 30, LS Electric Co., a South Korean manufacturer of electrical equipment, won a contract worth 319 billion won or 216.5 million US dollars from Bloom Energy, an energy solution company from the United States. If using the assumption of a rate of Rp16,200 per US dollar, the value of the contract is equivalent to around Rp3.5 trillion.

Through the contract, LS Electric will supply a power distribution system for a large-scale data center project in New Mexico, USA. The hyperscale data center is operated by a large American technology company, but its name is not disclosed.

Bloom Energy is known to be working with Oracle, a global cloud computing service provider, for AI and cloud computing infrastructure.

This contract shows another side of the AI fever. Behind smart apps and cloud computing, there is a huge need for electricity that must be kept stable. Without a strong power supply, data centers are just expensive buildings full of hot machines.

LS Electric has also bagged another contract in the US. Earlier this month, its subsidiary, LS Power Solution, signed a contract worth 106.6 billion won to supply transformers to an American energy infrastructure company.

At the same exchange rate, the value of the contract is around IDR 1.17 trillion. The transformer will be used to supply power to large-scale data centers in the central United States.

LS Electric said investment in electrical infrastructure in North America continues to increase. The trigger is the rising electricity demand due to the AI explosion.

For LS Electric, the North American market is now an important area to expand. For the technology industry, the message from this contract is also clear: AI is not just about software. It's also about electricity, substations, cables, and power distribution devices that work without much fuss.