In a bold move that underscores Nvidia's relentless push for efficiency in AI computing, CEO Jensen Huang announced at CES 2026 that the company's next-generation Vera Rubin platform — now in full production — can be cooled using water as warm as 45°C (113°F).
This revelation, made during Huang's keynote on January 5, 2026, eliminates the need for expensive chiller systems traditionally used to lower water temperatures in data centers.
The market reacted swiftly, with shares of major HVAC and cooling companies plummeting as investors anticipated reduced demand for complex refrigeration setups in future AI-driven facilities.
The Vera Rubin platform, comprising six specialized chips including the Rubin GPU, represents a significant leap forward. It doubles the power consumption of the current Grace Blackwell generation while maintaining similar airflow requirements and using the same 45°C water temperature for liquid cooling.
Huang described it as a "miracle," stating, "We are basically cooling this supercomputer with hot water; it is so incredibly efficient."
This single-phase direct liquid cooling (DLC) approach allows for warm-water operation, potentially slashing energy use on cooling by up to 20-30% in data centers, where cooling can account for 40% of total power consumption.
Nvidia's design also makes the NVL72 racks fanless, tubeless, and cableless, reducing assembly time from two hours to just six minutes and achieving 100% liquid cooling efficiency.
Immediate Market Backlash: Cooling Stocks Take a Hit
The announcement sent shockwaves through the HVAC sector, as investors bet that AI data centers will shift toward simpler, "dry" cooling solutions like evaporative coolers or free-air systems, bypassing the need for energy-intensive chillers.
On January 6, 2026 — the day after Huang's speech — stocks of key players tumbled:
- Johnson Controls (JCI): Shares dropped as much as 11%, closing down 7.5% at $112.40, hitting a multi-month low. Data centers represent a low-double-digit percentage of JCI's sales, making it particularly vulnerable.
- Modine Manufacturing (MOD): The stock plunged up to 21%, with intraday lows below the 200-day moving average, ending down around 12-13.5%. Modine, a specialist in thermal solutions like air handlers and chillers, saw this as a direct threat to its data center business.
- Carrier Global (CARR): Shares fell 5-6.6%, reflecting concerns over reduced chiller demand.
- Trane Technologies (TT): The company experienced a 5-10% decline, closing down 5.3% at $370.40.
Analysts at Barclays noted Nvidia's dominant role in AI, warning that Huang's comments "should not be underestimated," as they could accelerate a pivot away from traditional refrigeration. Baird Equity Research echoed this, highlighting data centers as a "substantial area of growth" for HVAC firms, but one now at risk.
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Broader Implications for AI and Data Centers
This innovation aligns with the exploding demands of AI infrastructure. Global data center power consumption is projected to reach 1,000 TWh by 2026 — equivalent to Japan's annual electricity use — driven largely by AI training and inference.
By enabling warm-water cooling, Nvidia's Rubin platform could redirect more energy toward computations rather than overhead, potentially lowering operational costs by 10-20% and supporting denser, more efficient deployments.
Experts see this as a boon for two-phase cooling technologies, which perform better with warmer water, unlocking higher efficiency in high-density environments. Operators might increasingly opt for "dry" coolers or evaporative systems, especially in regions with moderate climates, reducing reliance on mechanical chillers that consume vast amounts of power and water.
However, not all analysts view this as a death knell for HVAC giants. Motley Fool noted that while the sell-off is understandable, Nvidia's advancements could still drive overall demand for cooling solutions in expanding data centers. As AI hyperscalers like Microsoft, Google, and Amazon ramp up builds, the sector's growth — estimated at 15-20% annually — might offset short-term disruptions.
Nvidia's stock, meanwhile, rose modestly post-announcement, reflecting investor confidence in its AI dominance. With Rubin set for customer shipments later in 2026, this "hot water" strategy could redefine sustainable computing, proving that in the AI race, efficiency is as crucial as raw power.
