CATL invests $600 million in Chinese data center power business

CATL may play a larger role in powering the next generation of data centers after signing a framework agreement to increase its stake in Hangzhou Zhongheng Technology Investment, a major shareholder in Zhongheng Electric, an HVDC and power solutions provider.

Local media reports indicate China’s largest battery manufacturer has invested 4.1 billion RMB ($600 million) in Zhongheng Technology Investment, giving it a 49% stake in the business. Zhongheng Technology Investment is a major investor in Zhongheng Electric – an HVDC and power solutions business that has served companies such as Alibaba, Tencent, and other businesses with large data center needs.

The deal comes as companies such as chip manufacturer Nvidia call for a switch from AC- to DC-based electricity system architectures to keep pace with the increasing power demands of computer racks – a shift driven by power densities rising from roughly 10 kW per rack in traditional deployments to potentially 1 MW per rack in future AI-focused systems.

Nvidia has proposed a two-pronged response: implementing 800 V DC power distribution alongside integrated energy storage. Acquiring a larger stake in an electronics business with a track record in HVDC gives CATL exposure to both.

Zhongheng Electric has experience manufacturing 800 V DC power supply products, aligning it with likely future data center needs, while CATL already supplies a data center market that is increasingly reliant on battery energy storage systems (BESS) to secure grid connections.

CATL is not alone in increasing exposure to the data center business. SolarEdge told pv magazine in March 2026 that the company intends to have an AI-ready solid-state transformer product ready to launch “around 2027.”