When investors think about artificial intelligence (AI) investments, the largest U.S. tech firms — such as Nvidia, Amazon Web Services (AWS), Microsoft, Alphabet and Meta — typically come to mind. That is partly justified: these so‑called hyperscalers lead very large investments. Hyperscalers plan annual spending in the hundreds of billions, with a projected peak in 2029 of more than $1,300 billion.
In a market of that size, being a second‑ or third‑tier supplier can still represent a substantial business opportunity. Nvidia’s strong second‑quarter results may provide further momentum for the semiconductor sector as a whole, benefiting European suppliers as well.
European players in the AI value chain
Infineon
Infineon is best known as an automotive supplier. Recently, the company has found avenues to participate in AI investments by supplying power‑management chips to partners such as Nvidia. Management expects that this product line will generate around €1.5 billion in revenue this year, which is nearly one‑tenth of group revenue. Management forecasts further rapid growth: next year revenue from the segment could reach €2.5 billion, and independent market estimates even suggest the product line’s revenue might double.
STMicroelectronics
Another European chip supplier and Nvidia partner, STMicroelectronics, also provides power‑management solutions and plays a key role in enabling high‑speed data connections within data centers. STMicroelectronics’ AI‑related revenue could be at least €1 billion this year, roughly 7% of the group’s total revenue. The company expects that amount to double next year.
Siemens Energy
The rising energy demand driven by AI workloads creates opportunities for energy companies. Higher computational demand increases need for generation — including gas turbines — and requires significant investments in power‑grid infrastructure. Both areas represent meaningful growth potential for Siemens Energy.
Why this matters
While the largest U.S. technology companies remain at the forefront of AI spending, European firms further down the supply chain are securing tangible AI‑related revenues and growth prospects. For chipmakers and energy suppliers, hyperscaler investment plans and the growing energy requirements of AI applications create a stable market opportunity in the coming years.
