Shares of data center cooling and HVAC companies sold off after Nvidia CEO Jensen Huang said the company’s next-generation AI systems will no longer require traditional water-chilling equipment.
Johnson Controls $JCI ( ▼ 1.0% ) fell more than 7%, while Trane Technologies $TT ( ▲ 0.51% ) slid over 4% and Carrier $CARR ( ▲ 2.45% ) dropped about 1%, as investors reassessed demand for water-cooling infrastructure tied to AI data centers.
Hot water, fewer chillers
Speaking Monday evening at CES in Las Vegas, Huang said Nvidia’s upcoming Vera Rubin AI racks can be cooled with water at much higher temperatures than previous systems, removing the need for chillers entirely.
“We’re basically cooling this supercomputer with hot water, it is so incredibly efficient,” Huang said.
The comments matter because Vera Rubin has roughly twice the power of Nvidia’s earlier Grace Blackwell GPUs, yet appears to place far less stress on cooling systems.
Why the market reacted
A major part of the AI infrastructure trade has been the assumption that more powerful chips would require increasingly complex and expensive cooling solutions. Huang’s remarks directly challenged that narrative.
If future AI data centers can operate without large-scale water-chilling equipment, demand for certain HVAC and cooling products could be lower than previously expected, especially in hyperscale builds optimized around Nvidia’s newest hardware.
For now, the selloff reflects a reset of expectations rather than a collapse in the broader data center theme. But it is a reminder that Nvidia’s architectural decisions increasingly shape which corners of the AI supply chain win and which ones get left behind.