As artificial intelligence (AI) accelerates the buildout of data centers, the race to supply their enormous energy demands is drawing new alliances between China's technology and industrial giants.
On April 8, Zhongheng Electric, a digital energy company based in Hangzhou, announced that its controlling shareholder would receive a major strategic investment from CATL, the world's largest battery maker, as reported by Beike Finance. The deal, valued at about CNY4.1 billion (approx. $570 million), will give CATL a 49% stake and a direct role in corporate governance.
The partnership highlights a growing reality: as AI infrastructure expands, computing power is becoming inseparable from energy systems. Data centers, particularly those supporting large-scale AI models, consume vast amounts of electricity and increasingly rely on energy storage to stabilize supply and improve efficiency.
According to company filings cited by Cailian Press, CATL's investment will be made through a combination of cash and assets, including a controlling stake in Contemporary Tianyuan, a subsidiary focused on power electronics. The two sides plan to collaborate in areas such as green ICT infrastructure, transport electrification, and next-generation power systems designed to coordinate computing demand with electricity supply better.
Industry analysts say such coordination—sometimes described as the convergence of "computing and power"—is becoming a defining theme in the evolution of digital infrastructure.
Zhongheng Electric, founded in 1996, has built its business around digital energy systems aimed at enabling what it calls a "zero-carbon intelligent society." Its products include high-voltage direct current (HVDC) power systems for data centers, telecommunications power supplies, and electric vehicle charging equipment. Its customer base spans major Chinese technology firms and state-backed utilities.
That HVDC technology may be central to CATL's interest. Compared with traditional uninterruptible power supply systems, HVDC solutions offer higher efficiency, smaller footprints, and lower overall costs—advantages that are increasingly important as hyperscale data centers expand.
CATL, for its part, has been steadily extending its reach beyond batteries into broader energy ecosystems. In recent years, it has taken stakes in upstream materials suppliers and downstream manufacturing firms, reflecting a strategy to embed itself across the value chain. The Zhongheng deal adds another layer, linking energy storage more directly to AI-driven electricity demand.
Financially, Zhongheng Electric has shown signs of momentum. The company returned to profitability in 2023 and reported stronger earnings in 2024, with revenue continuing to grow at a double-digit pace into 2025.
Still, the partnership comes as the economics of AI infrastructure remain under scrutiny. While demand for computing power continues to surge, the cost of building and operating the energy systems that support it is rising in tandem.
Article edited by Jack Wu
