Vertiv Stock Dips Following AWS' In-House Cooling Solution Announcement.

Vertiv Holdings has dropped 8% in late Thursday morning trading after Amazon Web Services (AWS) revealed its in-house cooling system for data centers powered by Nvidia GPUs. The system, developed by AWS Vice President David Brown, is designed to efficiently cool data centers and reduce operating costs. The news has negatively impacted Vertiv's stock, as the company provides cooling and other data center infrastructure solutions.

Vertiv Holdings (NYSE: VRT) saw its stock fall by 11% on Thursday following the announcement by Amazon Web Services (AWS) of its custom cooling system designed for Nvidia's (NASDAQ: NVDA) high-performance AI graphics processing units (GPUs). The new cooling technology, the In-Row Heat Exchanger (IRHX), is a significant development that could impact Vertiv's future growth prospects.

AWS unveiled its IRHX cooling system on Wednesday, designed to efficiently cool data centers powered by Nvidia's GPUs. The system combines liquid and air-based components, circulating coolant to GPU chips through cold plates and removing heat via fan-coil arrays. This innovation allows AWS to accommodate Nvidia's heat-intensive GPU racks without requiring major data center renovations.

The IRHX cooling system addresses the substantial thermal demands of Nvidia's latest Blackwell GPUs, which consume significant energy and generate considerable heat when running AI workloads. AWS Vice President Dave Brown explained that traditional cooling methods would take up too much data center floor space or increase water usage substantially [1].

The introduction of the IRHX coincides with AWS launching new computing instances, such as the EC2 P6e and P6e Ultra, which give customers access to Nvidia's most powerful AI server configurations. These instances are designed to handle computationally intensive tasks associated with large AI models and generative AI.

The development of the IRHX is part of AWS's broader strategy to own more of its infrastructure. By developing its own cooling systems and chips, AWS aims to reduce its reliance on third-party suppliers and balance operational performance with cost. This approach positions AWS as a leader in cloud infrastructure innovation.

The news has negatively impacted Vertiv's stock, as the company provides cooling and other data center infrastructure solutions. Around 10% of Vertiv's overall sales come from liquid cooling, and AWS may be one of the largest customers [2]. The IRHX launch could weigh on Vertiv's future growth prospects.

References:
[1] https://finance.yahoo.com/news/vertiv-stock-falls-aws-unveils-153259891.html
[2] https://www.ainvest.com/news/aws-introduces-irhx-liquid-cooling-system-nvidia-ai-gpus-2507/