Nvidia Vera Rubin chip may be warning sign for AI investing boom

The stocks of companies that provide cooling systems for data centers plunged on Tuesday after Nvidia unveiled more efficient chips.

In a possible red flag for the artificial intelligence investment boom, the stocks of companies that provide cooling systems for data centers, plunged Tuesday after Nvidia unveiled more efficient chips.

Shares of Johnson Controls slid 6.2%, while shares of Modine Manufacturing plunged more than 7.4%. Trane’s stock fell 4%, and Carrier Global’s also dipped nearly 1%.

All of those companies sell industrial cooling systems to sprawling data centers, which tech companies are spending tens of billions of dollars to build and expand around the world as part of the AI investment wave.

Nvidia’s chips are a major driver of the AI revolution. CEO Jensen Huang told attendees at the Consumer Electronics Show in Las Vegas that the company’s next-generation Vera Rubin chips will not require chiller systems to cool the water that keeps the high-powered AI chips at an appropriate operating temperature.

“The power of Vera Rubin is twice as high as Grace Blackwell,” Huang said, referring to the current Blackwell generation of Nvidia chips. “And yet, and this is the miracle, the air that goes into it — the airflow is about the same — and the water that goes into it ... is 45 degrees Celsius.”