AI darling Vertiv is getting crushed as Amazon launches cooling system for data center servers

It’s been the kiss of death for many companies, if not industries, when Amazon decides it wants to enter the space.

Vertiv Holdings is feeling that sting, with shares down about 8% midday Thursday after the e-commerce and cloud behemoth announced late on Wednesday that it’s developed its own cooling system called the In-Row Heat Exchanger (IRHX). These will be used to cool down racks on racks of Nvidia GPUs in data centers.

Per Dave Brown, vice president of compute and machine learning services at Amazon Web Services, the company considered building liquid-cooled data centers from scratch but it would have taken too long, and the time frame wouldn’t be compatible with the access to Blackwell chips. Using cooling systems currently on offer “didn’t scale,” he added, because they took up too much floor space. So Amazon made its own.

IRHX is irking Vertiv shareholders, as “thermal management solutions” is a part of its data center infrastructure business. They’re losing a customer and gaining a competitor!

“Amazon Web Services rolling out its own server liquid-cooling system could weigh on Vertiv’s future growth prospects,” Bloomberg Intelligence senior analyst Mustafa Okur wrote. “Around 10% of overall sales come from liquid cooling, we calculate, and AWS may be one of the largest customers.”