VNET, CATL partner on gigawatt-scale compute-energy facilities

VNET and CATL are joining forces to build gigawatt-scale compute-energy infrastructure, pairing China's data center capacity with zero-carbon power.

VNET and CATL signed a strategic cooperation agreement to jointly develop gigawatt-scale compute-energy facilities, distributed networks, and a zero-carbon token ecosystem, pairing China's IDC infrastructure with clean power.

"By combining our complementary strengths and deepening cooperation across technology, infrastructure and supply chains, we will jointly advance innovation in integrated compute-energy systems," Josh Sheng Chen, founder and executive chairperson of VNET, said.

The three-layer ecosystem spans gigawatt-scale compute-energy facilities, distributed compute-energy networks, and a zero-carbon token ecosystem, built on green data centers and direct green power connection technologies. VNET operates in more than 30 cities across China, serving over 7,000 enterprise customers. The companies did not disclose financial terms, investment amounts, or project timelines. The cooperation is subject to the negotiation and execution of definitive agreements for specific projects.

The partnership arrives as AI data centers face surging power demands, with hyperscalers and colocation providers racing to secure clean energy. VNET shares closed at $7.92 on Aug. 17, up 4.21 percent, and the company is scheduled to report second-quarter earnings on Aug. 18. The agreement could strengthen VNET's sustainability credentials and help it capture demand from AI workloads requiring both compute capacity and zero-carbon power.

Compute-Energy Integration Gains Traction

The deal marks CATL's push beyond EV batteries into energy infrastructure, a move that could reshape how China's data center industry sources power. CATL, the world's largest battery maker, has been expanding into energy storage and grid-scale applications. The partnership gives CATL a direct channel into the data center market, where power consumption is projected to grow sharply as AI workloads expand.

For VNET, the agreement addresses a structural challenge: data center operators face rising scrutiny over energy use and carbon emissions. By integrating zero-carbon energy directly into its compute infrastructure, VNET could differentiate itself from peers such as GDS Holdings and Chindata Group, which are also expanding capacity to meet AI demand.

The zero-carbon token ecosystem component is notable — it suggests the companies plan to use blockchain-based mechanisms to track and trade carbon credits or energy attributes, a relatively novel approach in the data center industry. The companies did not provide details on how the token system would work or when it would launch.

VNET's Stock Path: From 25.1% Jump to Q2 Earnings

VNET's shares have been volatile this year. The stock jumped 25.1 percent in the 24 hours after a May 13 announcement of strategic investors, and rose 3.98 percent after its Q1 earnings on May 26. BofA Securities lowered its price target on VNET to $13.20 from $16.30, while Deutsche Bank initiated coverage with a Buy rating.

VNET trades at a significant discount to U.S. data center peers, reflecting concerns about China's regulatory environment and the company's debt load. The CATL partnership could help narrow that gap if it leads to concrete projects. Investors should watch for definitive agreements and specific project announcements, which the companies said would follow the framework agreement.

This article is for informational purposes only and does not constitute investment advice.