After the AI data center was roasted for consuming too much electricity, another magical phenomenon emerged - the biggest winner in powering and cooling AI is not NVIDIA or any other chip giant, but a French "veteran" that started with steel.

At the end of June, Huazhi International brought a group of Chinese entrepreneurs to France for an 11-day study tour of Germany and France. (Push notification link: 11 Days in Germany and France: A Soul-Searching Journey for 30 Chinese Entrepreneurs)

One of the stops on the itinerary is the headquarters of Schneider Electric.

"Schneider?"

"Is it the one that produces switch panels?"

Upon arriving at the Schneider headquarters campus in France, what we saw at first sight was not a high-tech exhibition hall, but 16 beehives placed on the lawn. The staff introduced that they distribute self-produced honey to employees every July, which is part of the ESG project. The "beehive" also symbolizes an efficient collaboration and equal communication work environment for employees.

A strong atmosphere of "traditional enterprises caring for employees" is overwhelming, and no one can figure out what a company that sells circuit breakers is doing with honey?

Entering the exhibition hall with this question in mind, what they saw in the following hours completely refreshed many people's cognition.

At 190 years old, this "veteran" has outpaced the times on its two legs

It's not surprising that outsiders are mean. After all, Schneider's roots lie in medium and low voltage power distribution, industrial automation, and building management, all of which sound like old-fashioned manufacturing industries that are "big, dumb, and crude". When a host of technology companies are competing to showcase their AI capabilities, its presence is not particularly strong.

But no one could have predicted that the biggest bottleneck of this wave of AI is not computing power at all, but electricity and heat.

During the visit, the staff presented a set of data: the sulfur hexafluoride insulating gas used in traditional medium-voltage equipment has a greenhouse effect 24,300 times that of carbon dioxide. Schneider has spent ten years replacing it with dry air - the new and old products are exactly the same size, allowing customers to replace them directly. The equipment's service life has been extended from 10 years to over 40 years, and the built-in digital sensor supports pre-diagnostic functions.

More crucial data is to follow. Currently, the power density of server racks in AI computing centers almost all exceeds 50 kW, and Schneider has successfully delivered a 120 kW project in 2025. From H100 to Blackwell Ultra, the power density of the entire cabinet has jumped from tens of kW to hundreds of kW in just three years.

In other words, the stronger the AI chip, the more electricity it consumes and the more heat it generates.

Electricity and heat are precisely the two things that Schneider has been pondering since its establishment in 1836.

In the past, its service targets were factories, buildings, and infrastructure. Now, it suddenly has a major new customer called "AI data center".

How fierce is this track? In the third quarter of 2025, Schneider Electric secured nearly $2.3 billion in data center infrastructure contracts in North America - not just selling a few UPS systems, but signing multi-year supply agreements with giants like Switch and Digital Realty, securing power and cooling system supplies for the coming years.

The proportion of data center business in the group's revenue is about to exceed 24%.

A steel plant established in the last century has, by some strange twist of fate, become an "infrastructure supplier of hydropower, electricity, and coal" in the AI era. It doesn't produce chips or train large models, but every kilowatt-hour of electricity consumed by chips and every watt of heat dissipated cannot bypass its system.

02. Two killer moves, hitting the pain points of the times

Over the past few years, a series of technological breakthroughs, from ChatGPT to NVIDIA GPUs, have been piling up, but the real bottlenecks have gradually surfaced. No matter how fast AI runs, if the electricity cannot be delivered and the heat cannot be dissipated, everything is in vain.

Why did Schneider come out at this critical moment?

Upon careful analysis, it becomes apparent that the company has strategically positioned itself in advance at two pivotal points, and the positioning is quite profound.

The first trump card is the line of computing power and heat dissipation.

This is actually a track that has been underestimated for a long time. Traditional air-cooled data centers can barely cope with a single cabinet power of more than ten kilowatts, and they become completely useless when it exceeds 50 kilowatts. Liquid cooling has shifted from being an "optional" solution to a "rigid demand". During the interview, the staff member said frankly, "Liquid cooling is no longer a choice, but a rigid demand for customers from the perspective of technical operation."

Schneider's response to this was swift: in February 2025, it invested approximately $850 million to acquire 75% of the shares of Motivair, a US-based liquid cooling technology company; immediately thereafter, it launched the Coolant Distribution Unit MCDU-55, which can provide 2.7MW of cooling capacity per unit; the product matrix covers a range from 105kW to 2.5MW.

A more aggressive move is to forge a deep partnership with NVIDIA and jointly release the Vera Rubin reference design - instead of each party going its own way, they package the entire chain of power supply, distribution, and cooling into a complete solution. The collaboration between the two parties, based on electrification and liquid cooling, is equivalent to directly securing the entry ticket for the next generation of AI cluster infrastructure.

During the visit, there was another impressive detail: In response to the issue of insufficient power load in old buildings in Europe, Schneider developed an edge control system that prioritizes charging during off-peak hours and automatically shuts down non-critical loads during peak periods, without requiring modifications to the existing electrical circuits. Even the uninterruptible power supply (UPS) has found new applications - preventing power outages and disconnections for e-sports players, and protecting lenses worth 20,000 to 30,000 yuan from damage due to voltage fluctuations for high-end projector users.

The second trump card is the supply chain.

If liquid cooling relies on technological foresight, then supply chain capability relies on solid and painstaking efforts.

Schneider Electric has been wearing the "Global Supply Chain Leader" hat conferred by Gartner for four consecutive years, and it's not a title given for nothing. In Gartner's evaluation system, what matters is not just "fast" and "cheap", but a weighted combination of financial performance, ESG practices, peer evaluations, and expert scores. In other words, it wins through a balanced performance across multiple dimensions, rather than through a single-point breakthrough.

Chief Supply Chain Officer Mourad Tamoud has a thought-provoking quote: "Each year brings different contexts, constantly testing our supply chain and forcing us to continue to strive, innovate, and transform."

Isn't this statement a bit too "modest" for a company that has been ranked first globally for four consecutive years? But upon reflection, it becomes clear that this is precisely Schneider's underlying logic - never betting one's life on any single dimension, but rather maintaining a perpetual balance between efficiency, resilience, and sustainability.

During the visit, the staff mentioned a case: Schneider has over 200 factories and distribution centers worldwide, with a total of 160,000 employees, and possesses complete R&D, production, and manufacturing capabilities in major market countries. This layout has proven to be a huge competitive advantage during the pandemic, as Schneider can allocate resources nearby when others' supply chains are disrupted.

This capability directly translates into competitiveness in the market: while competitors are still struggling with chip delivery, Schneider can achieve full-chain output of products, solutions, and services. Even many Chinese enterprises that venture overseas to the Middle East and Southeast Asia for general contracting projects still rely on Schneider's power distribution and automation systems.

03. Four lighthouses, three answers

Schneider has a bigger story to tell in China.

The "Global Lighthouse Factories" selection, organized by the World Economic Forum and McKinsey, is known as a synonym for "the world's most advanced factories". As of now, Schneider has 9 lighthouse factories worldwide, four of which are located in China.

Such a density is unusual for any multinational enterprise. Even more unusual is that none of these four factories were "copied and pasted" – each answers a different question.

[Shanghai Putuo Factory] addresses the question of "how to improve efficiency". With a 11,000-square-meter factory area and over 500 employees, AI technology is integrated from design to delivery. With a 74% automation rate, over 100 robots, and 10 AGVs (Automated Guided Vehicles), the per capita production efficiency has increased by 82%, and the order delivery cycle has been shortened by 67%.

The response from [Wuxi Factory] is "How to reduce carbon emissions". Through AI-optimized ecological design, a closed-loop carbon tracking platform has been established, and machine learning is used to explore energy-saving potential - achieving a 90% reduction in Scope 1 and Scope 2 carbon emissions, and a 65% reduction in Scope 3 emissions. Schneider now boasts four "Sustainable Lighthouse Factories", the most in the industry to receive this designation.

The answer to "how to cultivate people" is provided by the Wuhan factory. With the deployment of 21 AI agents, the employee skill readiness rate has increased from 20% to 76%, and the training period for new employees has been shortened from 75 days to 15 days. Digitalization is not intended to replace people, but to enable people to become experts faster.

[Beijing Yizhuang Park] has just obtained the "Sustainable Lighthouse" certification in June 2026, making it the latest one among them. Through more than 50 advanced use cases, it has achieved deep integration of sulfur hexafluoride-free green product design and supplier collaboration for carbon reduction - direct emissions have decreased by 65%, indirect emissions have been completely eliminated, value chain emissions have decreased by 43%, and overall energy efficiency has increased by 36%.

During the visit, the staff also presented a shocking statistic: Since 2009, Schneider's headquarters building has undergone multiple rounds of energy-saving renovations, including the installation of sensors and intelligent control systems, rooftop photovoltaics, and geothermal pumps. As a result, the energy consumption has decreased from 150 kWh/m²·year to 36 kWh/m²·year, a reduction of over 75%. The investment recovery period for the renovation is only 1.5 to 3 years. The Shanghai Fu Lei Library is even the world's first zero-carbon public library, standing seven stories tall and open 24 hours a day. Schneider provided the overall solution for this project.

Four lighthouses, four different answers.

This is precisely where Schneider is most clever. Instead of trying to solve all problems with one solution, it allows different factories to become solutions to different problems.

While others are still debating whether "Lighthouse Factories" are just a vanity project, it has already dismantled and modularized the capabilities of "Lighthouse" and integrated them into the global production network.

04. A large chessboard is being output in reverse

Another underestimation of Schneider by outsiders is its positioning in the Chinese market.

Many people mistakenly believe that Schneider's role in China is merely a production base—with cheap labor, a mature supply chain, and a vast market. Isn't that how multinational corporations typically operate?

But Schneider's approach is a bit different.

Yin Zheng, Executive Vice President of Schneider Electric, once made a statement that carries significant implications: "China is the only country that possesses Schneider Electric's full-line business R&D capabilities."

What France failed to achieve, China has done.

As of now, China has become Schneider's second largest market globally, one of its most important supply chain bases, and one of the four major R&D bases worldwide. It boasts five major R&D centers, an AI innovation laboratory, 30 factories and logistics centers, 22 zero-carbon factories, and 16 national-level green factories, with a local procurement rate of over 90% in the supply chain.

Behind all this lies Schneider's underlying logic: to treat the Chinese market as a "touchstone".

"The China AI Computing Power Center serves as a touchstone for thermal management. Once it adapts to the Chinese market, it can virtually 'conquer all competitors'." This innovative methodology, originating from Shanghai, is now being exported overseas in reverse.

Meanwhile, Schneider is leveraging its global network to assist Chinese enterprises in their "going global" efforts - expanding into the Middle East and Southeast Asian markets alongside China Energy Engineering Group, Power Construction Corporation of China, and SINOMACH Group, and forging deep partnerships with CATL and Xingxing Charging.

What you think is "foreign capital in China" has actually turned into "China in the world".

During the visit, the staff also revealed an interesting detail: Schneider is promoting a transformation from "selling products → connecting equipment → providing services", emphasizing the value of full lifecycle services. Innovation is driven by three major trends: geopolitical changes, AI and big data development, and the vision of new energy (bidirectional flow in the power grid). The cooperation principles with companies such as NVIDIA and China Fortune Special Steel are openness, non-exclusivity, joint invention, and market sharing - giving up short-term benefits of locking in customers in exchange for long-term gains of ecological dominance.

05. It's not a panacea, and there's still a cold sweat on it

Of course, we shouldn't deify Schneider's recent comeback.

Its most pressing issue at present is that the Chinese market is being pursued by local enterprises with "face-saving" strategies.

Data for 2024: Schneider sold 13.72 billion yuan in the domestic low-voltage electrical market, while Chint sold 13.34 billion yuan, narrowing the gap to 380 million yuan. In high-end markets such as industrial projects and infrastructure, although Schneider still has an advantage, this advantage is being rapidly eroded.

Meanwhile, Schneider's growth in the Chinese market in 2025 was only in the low single digits, with the construction end market remaining sluggish. Under pressure from gross margin, prices have been increased at least twice throughout the year in China.

Another hidden danger lies in the homogenization of growth engines. The data center business is on the verge of accounting for a quarter of the group's revenue. For a company with a valuation of 40 billion euros, over-reliance on any single track is a risk. In the event that the AI investment boom subsides or the liquid cooling technology path undergoes a sudden change, Schneider will be hit hard.

Of course, competitors are also eyeing the market. Siemens and ABB, old rivals, have never stopped, while local companies like Inovance Technology and Chint Electric are also desperately pushing their way up. The race in industrial automation and energy management has never been a one-man game.

Schneider has not been sitting idle either. While continuously strengthening its supply chain and lighthouse factories, it is also promoting the EcoStruxure Automation Open Platform (EAE) - breaking down protocol barriers between PLC manufacturers, promoting the international standard IEC 61499, and achieving cross-brand hardware interconnectivity. This move is fierce enough, clearly indicating that it is giving up the short-term benefits of locking in customers in exchange for the long-term gains of ecological dominance.

Since no one knows where the next technological turning point will be, Schneider's response strategy is straightforward. Predictions from a team of economists indicate that the potential of the Chinese and American markets is comparable. The strategic emphasis lies in flexibility and readiness, ensuring that the organization can respond to various economic scenarios at any time.

After visiting Schneider, what strikes everyone most may not be "how many advanced technologies Schneider has," but rather "why it can maintain its leading position?"

The answer is actually quite simple.

Because Schneider has never remained stagnant in the past. From the era of steel to the era of electricity; from equipment manufacturing to digital energy; from industrial enterprises to energy technology enterprises. It has been constantly seeking the next growth curve.

Today, Chinese enterprises are also standing at a new node of industrial transformation. AI, new energy, smart manufacturing, and globalization are redefining the rules of competition.

What enterprises truly need to learn is not to replicate Schneider's products, but to learn its way of thinking in the face of changes:

Don't cling to past successes, but instead, take the initiative to create future value.

This is perhaps the greatest inspiration that a 190-year-old enterprise can leave to today's entrepreneurs.