SLB Bets $4.1 Billion on the AI Data Center Boom

SLB NV, the largest oilfield services company, announced on August 31 that it has agreed to purchase Kelvion, a thermal management and heat exchange technology company, for about $3.4 billion in cash and debt assuming roughly $0.7 billion. The acquisition, expected to close in the first half of 2027, will strengthen SLB's data center business and capitalize on the growing demand for power and cooling infrastructure driven by the AI boom.

SLB believes the deal will broaden its equipment offerings and nearly double its revenue potential per gigawatt of delivered capacity. The company expects the acquisition to be accretive to earnings per share and free cash flow per share within the first year after closing, and to generate approximately $120 million in annual EBITDA synergies within three years post-closing.

SLB's CEO, Olivier Le Peuch, emphasized that the acquisition aligns with the company's ambition to become an industrial technology partner to the data center industry and accelerate its path to become a more integrated data center infrastructure solution provider. This move reflects a broader shift among oilfield service providers towards diversifying into power equipment, turbines, and data center solutions as drilling activity slows.

While SLB sees significant upside potential in the deal, it cautions that the AI bubble risk remains a concern, as hyperscalers' aggressive data center investments could lead to subpar economic returns if AI spending slows.