Key Takeaways:
A 10-year, $6.29 billion supply agreement between Prysmian and Koch-owned Molex underscores how AI-driven demand is reshaping the physical infrastructure of the internet.
Prysmian, the Italian cable maker, agreed to supply data-center cables to Molex in a 10-year deal valued at $6.29 billion (€5.5 billion), the company said Monday. The agreement is one of several new long-term contracts the company has signed with infrastructure providers as hyperscalers race to build out AI computing capacity.
"The scale of data-center construction we're seeing is unprecedented, and it's driving demand for every layer of physical infrastructure — from fiber optics to power cables," said Massimo Battaini, chief executive officer at Prysmian, in a statement. "This agreement with Molex secures a decade of supply for one of the industry's most critical connectivity providers."
The deal covers the supply of copper and fiber-optic cables used to connect servers, storage systems, and networking equipment within data centers. Molex, a unit of Koch Industries, is one of the largest manufacturers of electronic connectors and cabling solutions for the data-center market. Prysmian said the contract includes provisions for capacity expansion as Molex's customers — the world's largest cloud operators — continue to scale their data-center footprints.
The agreement reflects a structural shift in the data-center supply chain. As AI workloads require exponentially more power and bandwidth, hyperscalers including Amazon Web Services, Microsoft Azure, and Google Cloud are locking in long-term supply commitments for everything from land and electricity to networking gear. Global data-center CapEx is projected to exceed $500 billion by 2028, according to industry estimates, with cabling and connectivity representing a growing share of that spend as network speeds increase from 400G to 800G and beyond.
For Prysmian, the deal provides revenue visibility through 2036 and validates its strategy of pivoting from traditional utility and telecom cables toward higher-margin data-center products. The company has been investing heavily in manufacturing capacity for high-speed copper and fiber assemblies, including a new plant in Germany announced earlier this year. For Molex and Koch Industries, the agreement locks in critical supply for a decade, insulating the company from potential cable shortages as demand surges.
Prysmian shares rose as much as 4.2% in Milan trading following the announcement. The company trades at roughly 14x forward earnings, a discount to some European industrial peers, as investors have weighed the cyclicality of its traditional cable businesses against the growth of its data-center segment. The Molex deal could shift that calculus, providing the kind of recurring, long-duration revenue that typically commands a higher multiple.
This article is for informational purposes only and does not constitute investment advice.
