Compass Datacenters has signed a deal to buy $3 billion worth of equipment.

According to the companies, the five-year deal has been motivated in part by the artificial intelligence (AI) boom which has significantly increased demand for data centers.

The agreement extends a relationship, announced in July 2023, in which Schneider Electric and Compass would integrate their supply chains. Schneider will manufacture prefabricated modular data center equipment at a 110,00 square foot manufacturing facility adjacent to Compass's campus in Red Oak, Texas, and ship it to customers across the US.

Between them, Schneider Electric and Compass Datacenters have manufactured and delivered around 150 modular data centers to date.

Schneider Electric's president for North America, Aamir Paul, told Reuters that AI is fundamentally changing the needs of a data center, and can increase energy use by up to ten times. “If you’re going to build a data center that is much more energy intensive, you have to think differently down to the actual design of the data center and the facility itself,” Paul said.

Because of this, Schneider Electric and Compass set about integrating supply chain operations.

"We are extremely grateful for the unwavering support and unparalleled expertise that Schneider Electric has already provided in supplying us with pre-fabricated data center power rooms," said Chris Crosby, CEO at Compass Datacenters. "Our collaborative efforts will allow us to meet the increasing demands from our customers to deliver cutting-edge data center solutions in an innovative manner."

In June 2023, Compass announced it would be acquired by Brookfield Infrastructure Partners, alongside existing Compass investor, Ontario Teachers' Pension Plan. The deal, estimated at $5.5bn, is expected to be complete by the end of the year.

Compass began offering Edge modular data centers in April 2022, through its Compass Quantum unit, under an as-a-service model.