Prysmian Seals €5.5 Billion Data Center Cable Deal with Koch-Owned Molex

Prysmian Group, a leading global player in the cable and systems industry based in Italy, has entered into a significant collaboration with Molex, an electronics company owned by the U.S. group Koch. Under the agreement, which will span up to 10 years, Prysmian will supply optical cables for data centers. The total value of the deal is up to €5.5 billion (approximately $6.2-6.4 billion), with Molex providing an upfront payment of €550 million to Prysmian.

This strategic partnership is seen as a transformative step for Prysmian's Digital Solutions business unit. The agreement is part of Prysmian's broader plans to significantly increase its optical cable and fiber production capacity, particularly in the United States. The company aims to invest €1.25 billion by 2031 to expand this capacity, more than doubling its fiber output in the U.S. This investment is expected to create over 1,000 jobs worldwide, with 600 of those in the U.S.

The deal with Molex forms an anchor for a wider set of new agreements and commercial initiatives with hyperscalers and data center infrastructure providers. Prysmian anticipates these broader initiatives could generate over €10 billion in additional cumulative revenue by 2035. Annual revenues from these initiatives are projected to reach up to €1.1 billion starting from 2031.

The announcement was met with a positive market reaction, with Prysmian's shares rising. Analysts noted that such long-term supply commitments provide greater certainty regarding the company's profit margin outlook and can help de-risk Prysmian's balance sheet. The surging demand driven by artificial intelligence (AI) infrastructure and ongoing data center upgrades is creating significant growth potential in the optical cable market. Prysmian's strong position and technical expertise in this field position the company advantageously.

The increasing importance of data centers and the acceleration of digital infrastructure investments globally underpin the economic context of such agreements. The proliferation of AI applications, in particular, demands greater processing power and, consequently, more advanced data center infrastructures. This drives the demand for high-performance and energy-efficient optical cables. Prysmian's expansion of its manufacturing footprint in the U.S. could also make the company more resilient to potential trade tensions and demands for localized supply chains.

Market analysts suggest that Prysmian will gain significant growth momentum in its digital solutions business through this strategic move. The upfront payment from Molex reduces the financial risk for Prysmian's substantial capacity expansion investments, while the long-term agreement provides a stable demand signal. Although Prysmian had previously postponed plans for a dual listing in the U.S., its expanding operational footprint and strengthening market position in the country could create favorable conditions for a potential Wall Street listing in the future.