Chinese battery manufacturer CATL has invested 4.1 billion RMB (US$600 million/approximately €552 million) in Hangzhou Zhongheng Technology Investment, acquiring a 49 per cent stake in the business and deepening its involvement in high-voltage direct current infrastructure serving China's rapidly expanding data centre sector. Zhongheng Technology Investment is a major shareholder in Zhongheng Electric, an HVDC and power solutions provider with an established customer base that includes Alibaba, Tencent, and other businesses with large data centre requirements.

ESS News reported that the deal positions CATL to capitalise on a structural shift in data centre architecture, as chip manufacturers including Nvidia advocate for a transition from alternating current to direct current-based electricity systems to accommodate rising power densities, which are projected to increase from around 10 kW per rack in traditional deployments to potentially 1 MW per rack in future AI-focused systems.

Zhongheng Electric has experience manufacturing 800 V DC power supply products, aligning it with the direction advocated by Nvidia, which has proposed implementing 800 V DC power distribution alongside integrated energy storage as a two-pronged response to the power demands of next-generation compute infrastructure.

CATL already supplies the data centre market through battery energy storage systems used to secure grid connections, and the Zhongheng investment extends that position into the power conversion and distribution layer of the data centre stack.

The investment reflects a broader trend of energy storage manufacturers expanding into adjacent infrastructure markets driven by the growth of AI computing. SolarEdge has also indicated plans to launch an AI-ready solid-state transformer product targeting data centre power density challenges by approximately 2027.

Read the full report on CATL's investment in the Chinese data centre power sector.