Former Honeywell CEO David Cote Leverages AI Wave to Propel Cooling Company Vertiv
Fortune reports that former Honeywell CEO David Cote is benefiting from the AI wave through cooling company Vertiv.
Vertiv is an 80-year-old air conditioning and critical digital infrastructure company that went public via SPAC around 2020. Since 2021, its market value has increased from less than $11 billion to approximately $109 billion, with an annualized return of about 50.5%, ranking among the top in the S&P 500.
After retiring in 2019, Cote collaborated with Goldman Sachs to acquire and lead Vertiv's transformation, focusing on developing direct-to-chip liquid cooling technology to meet the high-density heat dissipation needs of AI data centers. The company holds about 23.5% of the global data center thermal management market.
Vertiv has expanded its production capacity and acquired related cooling technology companies to strengthen its liquid cooling capabilities.
Driven by events, the expansion of AI computing power has increased the demand for data center cooling, directing funds toward liquid cooling and thermal management suppliers. Beneficiaries include Vertiv and similar infrastructure stocks, while traditional air cooling solutions face pressure.
Source: Public Information
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David Cote achieved significant shareholder returns during his tenure as CEO of Honeywell and chose Vertiv as his second venture after retirement. The company has transformed from traditional industrial cooling to a core supplier for AI data centers, addressing the heat dissipation bottleneck caused by high GPU power consumption.
In terms of capital strategy, Cote has invested resources into liquid cooling R&D and capacity expansion through SPAC and strategic adjustments, motivated by the prediction that data growth will far exceed infrastructure supply, making liquid cooling a necessity for high-density deployments. The acquisition and tripling of capacity plans further secure the supply chain.
Similar to beneficiaries like Nvidia in AI hardware, competitors such as Schneider and Eaton are also positioning themselves in the cooling sector; we are currently in a phase where AI infrastructure extends from chips to full-stack thermal management.
Essentially, this is a technological replacement. The shift from air cooling to liquid cooling addresses the limits of high power density heat dissipation, with the mechanism being that direct-to-chip cooling enhances energy efficiency and rack power limits, transforming cooling from a supplementary system into a critical bottleneck and value capture point for AI expansion.
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