On August 15, 2026, The Wall Street Journal reported that US manufacturing rose to its highest level since 2022 last month. It was driven mainly by demand from AI data centers, with industrial giants including Caterpillar Inc. (NYSE:CAT), Cummins Inc. (NYSE:CMI), and Ford Motor Company (NYSE:F) shifting their businesses to capture the opportunity.
Why This Matters
Traditional manufacturers built for construction and trucking are suddenly finding their biggest growth opportunity in a completely different market: AI data centers. Does this pivot show smart, durable diversification, or are these companies chasing the AI boom’s current momentum into a market that could cool once data center construction slows?
AI Boom Reframes Caterpillar’s Growth Strategy, but Leaves It Exposed to Infrastructure Cycles
Electricity generators have become Caterpillar Inc. (NYSE:CAT)’s single most profitable segment. The company is investing $725 million to expand generator production at an Indiana plant while converting a Kansas plant to produce turbine engines popular with data centers and resuming production of 10-megawatt generators last made in 2022. CEO Joe Creed said of data center customers, “If we can get more units out, they’re asking us to give them more.”
Caterpillar Inc. (NYSE:CAT)’s core historical business, construction equipment, is being overshadowed by a newer and less-tested data center power business. Any slowdown in AI infrastructure spending would hit the same generator segment that’s now the firm’s top profit driver.
Cummins Bets Big on Data Centers, Facing Execution Risks Outside Its Core Truck Business
Cummins Inc. (NYSE:CMI) is investing $450 million to expand generator production, on top of a $200 million expansion completed just last year. The firm expects data center-related sales to rise 80% to $9 billion by 2030. It is a specific target that shows management confidence.
Cummins Inc. (NYSE:CMI)’s engine business has historically depended on trucking and industrial cycles, and layering a fast-growing but newer data-center segment on top adds a business the company has less operating history managing at this scale.
Ford’s Pivot
Ford Motor Company (NYSE:F) was also named among manufacturers pivoting toward AI-data-center-adjacent opportunities. However, it revealed fewer specific investment figures than Caterpillar and Cummins.
Insider Monkey’s Hedge Fund Data
Caterpillar Inc. (NYSE:CAT) was held by 87 hedge funds as of Q1 2026, up from 86. Cummins Inc. (NYSE:CMI) was held by 79, up from 67. Ford Motor Company (NYSE:F) was held by 50, down from 52. For comparison, fellow power equipment maker Eaton was held by 73 hedge funds, down from 87.
Conclusion
Caterpillar and Cummins are proving the AI data center boom can genuinely revive old industrial businesses. However, both firms are now more exposed to a single fast-moving market than they’ve ever been.
READ NEXT: BP p.l.c. (BP) vs. Shell plc (SHEL): Two Oil Majors Cash In on the Iran War, But Tell Different Stories and ArcelorMittal (MT) vs. Microsoft Corporation (MSFT): A Steel Giant Bets Its Future on Azure.
Disclosure: None. This article is originally published at Insider Monkey.
