Vertiv Holdings (NYSE:VRT) saw its stock tumble 11% on Thursday following Amazon Web Services’ (NASDAQ:AMZN) announcement of proprietary cooling hardware aimed at handling the intense thermal demands of Nvidia’s (NASDAQ:NVDA) high-performance AI GPUs.
Unveiled on Wednesday, AWS’s new In-Row Heat Exchanger (IRHX) system is a custom-built alternative to traditional liquid cooling systems commonly supplied by companies like Vertiv. Designed specifically to cool Nvidia’s latest Blackwell GPUs, the IRHX solution enables AWS to manage heat output efficiently without extensive data center retrofits or increases in water consumption.
Dave Brown, AWS Vice President, noted that conventional cooling approaches “would take up too much data center floor space or increase water usage substantially,” making the new system a more sustainable and space-efficient option.
The development raises questions about future demand for Vertiv’s cooling solutions, particularly from major cloud service providers. Bloomberg Intelligence analyst Mustafa Okur commented, “AWS rolling out its own server liquid-cooling system could weigh on Vertiv’s future growth prospects. Around 10% of overall sales come from liquid cooling, we calculate, and AWS may be one of the largest customers.”
The IRHX system, co-developed with Nvidia, integrates both liquid and air-cooling elements, featuring cold plates that circulate coolant directly to GPU chips and fan-coil arrays to expel heat. Notably, the entire system was designed and brought to market in just 11 months.
The launch coincides with AWS rolling out its most advanced AI server instances yet, powered by Nvidia GPUs and backed by AWS’s proprietary Nitro system for optimized networking and system management.
As AWS moves to vertically integrate critical infrastructure components, the move signals potential long-term disruption in the data center cooling space — putting pressure on Vertiv and other vendors reliant on cloud giants for growth.
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