AI Powers Pipeline Boom for Data Centers

The surge in AI data center development is driving a significant demand for specialized piping, extending beyond the traditional semiconductor and server manufacturing chain. Data centers are becoming major consumers of electricity, leading to a rise in on-site gas-fired power plants in the US to ensure reliable energy. This trend directly benefits pipeline manufacturers, as these plants require fuel transport lines, while the data centers themselves need sophisticated piping for cooling and thermal management.

Indian companies Welspun Corp and DEE Development Engineers are emerging as key players in this niche. Welspun Corp, a global leader in large-diameter line pipes, holds a substantial share of the US market and has its US capacity booked through FY28. The company supplies pipes for gas connections to dedicated power plants fueling data centers.

DEE Development Engineers, a major player in process piping solutions, supplies specialized rigid and metal piping for data center cooling systems. Its Thailand plant is fully booked for the next three years, serving global OEMs with piping for heat recovery steam generators essential for power generation supporting data centers.

Both companies have seen significant stock price appreciation in 2026 due to this growing opportunity. Welspun Corp boasts a large order book of ₹42,100 crore, while DEE Development Engineers has an order book of ₹2,428 crore, providing substantial revenue visibility.

Despite the market recognizing this opportunity, leading to premium valuations for both stocks, the underlying demand driven by AI infrastructure continues to grow. The increasing power requirements of data centers are fueling demand for both gas pipelines and specialized cooling solutions.