Emerson Electric, a name synonymous with industrial automation and tools, has quietly positioned itself to be a major beneficiary of the explosive growth in Artificial Intelligence. While most analysts are laser-focused on Emerson's recent acquisition of National Instruments and its implications for the discrete automation market, a more compelling story is unfolding within its power franchise.

The rise of AI, particularly the power-hungry data centers required to support it, is driving a surge in electricity demand unseen since the early 2000s. While Emerson doesn't have a direct presence in data centers, its power generation, transmission, and distribution businesses are poised to capitalize on this burgeoning need.

The company's second-quarter earnings call revealed a fascinating piece of information that seems to have flown under the radar: **Emerson's strategic project funnel in power is up 45% year-over-year.** This isn't a blip on the radar; it's a clear indication of a significant shift in the power landscape, and Emerson is right at the heart of it.

This dramatic increase is driven by a confluence of factors. Utilities are witnessing an unprecedented surge in demand, fueled not just by traditional data centers, but also by the emerging behemoths of AI infrastructure. ChatGPT, a leading example of AI's consumer-facing potential, consumes an astounding 6 to 10 times the power of a traditional Google search. As hyperscalers like Google and Microsoft scramble to build out their AI capabilities, power demand is skyrocketing.

The numbers are staggering. Georgia Power, a major utility, recently revised its load growth projection to be 17 times greater than its previous forecast. Dominion Energy has seen data center growth double its 10-year average annual peak load growth, with AI promising to further fuel this trend.

Emerson's Ovation automation platform, with a commanding 50% market share in North America, is the go-to solution for power generation plants. Coupled with its Ovation Green portfolio for managing renewable energy assets, Emerson is well-positioned to ride the wave of power plant upgrades and new builds.

But Emerson's advantage extends beyond generation. Its acquisition of AspenTech has brought Digital Grid Management (DGM) software into its portfolio, a critical tool for managing the increasingly complex grid of the future. With a 40% market share in North America, AspenTech's DGM is perfectly positioned to capture the surge in grid digitalization investments, a market projected to grow in the high teens.

The Untapped Potential: Optimization Software

Here's where things get truly interesting. While analysts are understandably focused on the cost synergies stemming from the National Instruments acquisition, Emerson is hinting at untapped potential for **optimization software within power generation plants** – a synergy opportunity that could be game-changing. Imagine the potential of AspenTech's software suite being deployed to optimize Emerson's Ovation-controlled power plants. This integration could drive significant efficiency gains for power producers, further solidifying Emerson's leading position in the industry.

Visualizing Emerson's Power Project Funnel Growth

The chart below illustrates the dramatic increase in Emerson's power project funnel, highlighting the surge in demand driven by the AI revolution.

The potential for Emerson's power franchise in the AI era is vast. While the company is staying tight-lipped about specific revenue synergy targets, the 45% increase in its power project funnel speaks volumes. As the AI revolution gathers momentum, Emerson Electric is quietly transforming itself into the silent powerhouse of the future.

"Fun Fact: The first large-scale commercial use of a digital computer was for calculating electricity usage. In 1951, the J. Lyons & Co. bakery in the UK used the LEO I computer to manage its payroll and inventory, including tracking the energy consumption of its ovens and other equipment."