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Happy Tuesday.
The build this week: the race to power AI reached deep into heavy industry.
Eaton agreed to spin off its entire car-parts business into rival Dana and keep the electrical-equipment arm that sells into data centers and the power grid. Google reportedly handed Intel a packaging order for more than 3 million AI chips. Lockheed Martin won $2.29 billion to keep the F-35 fleet flying, Cypress Creek lined up $3.5 billion to build a giant solar-and-battery project in Arkansas, U.S. Steel doubled a plant investment to more than $2 billion, and Ingredion agreed to buy Tate & Lyle for $5 billion.
The Lead
For two years, the AI spending boom was a story about chips and cloud computing. This week it moved into heavy industry, into the unglamorous electrical gear that actually moves power around. Eaton, a 114-year-old maker of electrical and industrial equipment, agreed to spin off its Mobility Group (the transmissions, clutches, and driveline parts it sells to carmakers) and merge it into rival Dana through a Reverse Morris Trust, a tax-free structure that lets a company shed a division straight into a merger. The combined car-parts company will be worth more than $10 billion. Eaton keeps about $1.1 billion in cash and a majority stake for its shareholders.
What matters is what Eaton holds onto: an electrical business now pointed straight at data centers and the power grid, the two fastest-growing sources of electricity demand in the country. The same bet is showing up across the industry. Infineon, a German chipmaker, switched on a €5 billion factory in Dresden three months early because orders for its power chips (the parts that manage and convert electricity inside a data center) are arriving faster than expected. GE Vernova, which builds turbines and grid hardware, booked more orders for data-center electrical equipment in the first three months of this year than in all of last year.
The bottleneck in the AI build has moved. A year ago the scarce thing was the chip; now it is the electricity to run it and the hardware to deliver it: transformers, switchgear, power chips, and the companies that make them. PJM, which runs the largest U.S. power grid, just raised its long-term demand forecast on data-center growth. The old, cyclical industrial names that make this gear are suddenly among the best-positioned companies in the economy, and they are reshaping themselves to prove it.
Defense & Space
Lockheed Martin won a $2.29 billion Navy contract to keep the F-35 fighter fleet flying, covering parts, field support, and day-to-day fleet management across the Air Force, Marine Corps, and Navy through December 2028.
Sikorsky booked $525 million to keep developing and upgrading the CH-53K King Stallion, the Marine Corps' heavy-lift helicopter, through 2031.
General Motors Defense won $142.99 million for more Infantry Squad Vehicles, light troop-carrying trucks for the Army, pushing the program past $623 million.
Bechtel Plant Machinery took a $128.4 million order to build components for the Navy's nuclear propulsion program, the reactors that power its submarines and aircraft carriers.
General Atomics won $49.7 million to develop sensors that detect and pinpoint enemy signals across the electromagnetic spectrum.
Semiconductors & Electronics
Intel reportedly landed an order from Google to handle advanced packaging for more than 3 million of Google's custom AI chips in 2028, according to The Information, a major vote of confidence in Intel's struggling contract-manufacturing business.
Applied Materials, KLA, and Lam Research climbed 3% to 5% after Cantor Fitzgerald lifted its forecast for 2026 spending on chipmaking equipment to $145 billion, up about 32% from last year.
Cadence signed a deal with Intel's foundry to tune its chip-design software for Intel's coming 14A manufacturing process, aimed at high-performance and mobile chips.
Wolfspeed launched its fifth-generation silicon-carbide chips, a power-electronics technology that cuts energy losses up to 27% in the 1,200-volt parts used in EVs and industrial gear.
Energy & Materials
Cypress Creek Energy closed $3.5 billion in financing for the first two phases of its Steel River project in Arkansas, which pairs 1.63 gigawatts of solar with 1.9 gigawatt-hours of battery storage, backed by Barclays, BNP Paribas, Santander, and Wells Fargo.
General Motors committed up to $900 million to Peak Energy to build sodium-ion batteries, a cheaper, cobalt-free alternative to lithium, for grid and data-center storage.
Oklo cleared a key Department of Energy safety review for its first Aurora power plant in Idaho, a 75-megawatt reactor and an early step toward building a fleet of small nuclear plants.
Manufacturing & Automation
U.S. Steel doubled its investment to more than $2 billion to build a new hot-strip mill at its oldest plant, the Edgar Thomson Works near Pittsburgh, in a three-year project.
Teradyne Robotics unveiled a line of "physical AI" products, including a self-driving pallet jack from its MiR unit and an AI training tool for Universal Robots arms, built with Scale AI.
Burro launched the Grande 44, a 44-horsepower autonomous work robot that tows up to 6,000 pounds, aimed at farms, construction, and other heavy outdoor jobs.
Maritime & Shipbuilding
The U.S. Coast Guard picked Kodiak and Seward, Alaska as the first home ports for its new Arctic Security Cutters, part of a roughly $3.5 billion effort to rebuild America's icebreaker fleet, with the first ship due in 2028.
ABS and HD Hyundai teamed up to design a U.S.-flagged tanker, a 50,000-deadweight-ton oil and chemical carrier meant to help rebuild the small American commercial fleet.
Supply Chain & Freight
The U.S. Department of Transportation opened a $626.7 million grant round for freight and rail projects, including a first-ever $200 million set-aside for truck parking, with applications due in July.
Gatik signed a multi-year deal with PepsiCo to expand its self-driving box trucks across PepsiCo's North American supply chain, where they already run routes in Texas, Arizona, and Arkansas.
The Port of Savannah is opening a $49.25 million inspection facility with U.S. Customs for refrigerated cargo, as its chilled-food imports climb 10.5% this fiscal year.
Dealbook
Ingredion agreed to buy Tate & Lyle for £3.7 billion ($5.0 billion), combining two of the largest makers of food and industrial ingredients, at a 59% premium.
Hubbell completed its acquisition of NSI Industries, a maker of more than 15,000 electrical products, funded with $1.9 billion in senior notes and $900 million in loans.
Sembcorp closed its A$6.5 billion ($4.3 billion) purchase of Australian power company Alinta Energy, adding 3.4 gigawatts of generation and a 10-plus gigawatt project pipeline.
Neura Robotics raised up to $1.4 billion at a $7 billion valuation, the largest round ever for a robotics company, led by Tether with Nvidia, Amazon, and Bosch, to build humanoid robots.
Einride agreed to go public through a SPAC merger at a $1.35 billion valuation, with $113 million in new funding, to scale its electric and self-driving freight trucks.
Back Thursday.
