Kandi Technologies Bets $2.9 Million on AI's Power Problem

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Kandi Technologies Group Inc. (KNDI) announced Monday that it will acquire a 51% controlling stake in Hangzhou Xinchu New Energy Technology Co. Ltd. for 20 million Chinese yuan (about $2.9 million) in cash. The acquisition gives Kandi an entry into the fast-growing AI data center backup power and energy storage market.

The deal is expected to close in July 2026.

Xinchu develops lithium battery backup power systems and battery management systems (BMS) for data centers and telecom base stations. Its founding team brings experience from Southeast Asia, the Middle East and Africa.

The company designs lithium battery solutions for AI data centers and high-density GPU computing environments. These facilities require reliable power and rapid response times.

Investment Supports AI Infrastructure Growth

Xinchu's products include UPS lithium battery packs, high-rate backup power cabinets with 6C discharge capability, proprietary BMS technology and an intelligent monitoring platform.

Today, most of the company's revenue comes from AI data center backup power, uninterruptible power supply (UPS) systems and telecom base station backup solutions. However, it also plans to expand into higher-margin software and services.

"The rapid buildout of AI computing infrastructure worldwide depends on the underlying energy framework, power delivery, and system reliability, driving demand for next-generation power solutions," said Chen Feng, chief executive officer of Kandi.

"This investment gives Kandi direct exposure to the energy infrastructure that enables AI compute at scale, establishing our position in an early-stage, structurally critical market that is poised for long-term global expansion."

According to Kandi, AI workloads create rapid power fluctuations. Therefore, operators need millisecond-level response times, high-rate discharge capability and proactive power quality management.

To support Xinchu's expansion, Kandi plans to invest in product development and market growth. In addition, it expects to use its global supply chain to improve procurement efficiency and reduce costs.