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Amazon Web Services is building equipment to cool Nvidia GPUs as AI boom accelerates

Amazon Web Services is building equipment to cool Nvidia GPUs as AI boom accelerates

CNBC09-07-2025
Amazon said Wednesday that its cloud division has developed hardware to cool down next-generation Nvidia graphics processing units that are used for artificial intelligence workloads.
Nvidia's GPUs, which have powered the generative AI boom, require massive amounts of energy. That means companies using the processors need additional equipment to cool them down.
Amazon considered erecting data centers that could accommodate widespread liquid cooling to make the most of these power-hungry Nvidia GPUs. But that process would have taken too long, and commercially available equipment wouldn't have worked, Dave Brown, vice president of compute and machine learning services at Amazon Web Services, said in a video posted to YouTube.
"They would take up too much data center floor space or increase water usage substantially," Brown said. "And while some of these solutions could work for lower volumes at other providers, they simply wouldn't be enough liquid-cooling capacity to support our scale."
Rather, Amazon engineers conceived of the In-Row Heat Exchanger, or IRHX, that can be plugged into existing and new data centers. More traditional air cooling was sufficient for previous generations of Nvidia chips.
Customers can now access the AWS service as computing instances that go by the name P6e, Brown wrote in a blog post. The new systems accompany Nvidia's design for dense computing power. Nvidia's GB200 NVL72 packs a single rack with 72 Nvidia Blackwell GPUs that are wired together to train and run large AI models.
Computing clusters based on Nvidia's GB200 NVL72 have previously been available through Microsoft or CoreWeave. AWS is the world's largest supplier of cloud infrastructure.
Amazon has rolled out its own infrastructure hardware in the past. The company has custom chips for general-purpose computing and for AI, and designed its own storage servers and networking routers. In running homegrown hardware, Amazon depends less on third-party suppliers, which can benefit the company's bottom line. In the first quarter, AWS delivered the widest operating margin since at least 2014, and the unit is responsible for most of Amazon's net income.
Microsoft, the second largest cloud provider, has followed Amazon's lead and made strides in chip development. In 2023, the company designed its own systems called Sidekicks to cool the Maia AI chips it developed.
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Stock Index Futures Climb as U.S. Reaches Trade Deal With Japan, Tesla and Alphabet Earnings Awaited

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Bank of America raises price on Amazon ahead of earnings
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Bank of America raises price on Amazon ahead of earnings

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Better Cloud AI Stock: CoreWeave vs. DigitalOcean
Better Cloud AI Stock: CoreWeave vs. DigitalOcean

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Key Points CoreWeave's transformation from a crypto miner to a cloud GPU leader is paying off. DigitalOcean is expanding its cloud platform at a slower and steadier rate. The hare might beat the tortoise this time. 10 stocks we like better than CoreWeave › CoreWeave (NASDAQ: CRWV) and DigitalOcean (NYSE: DOCN) both help companies process artificial (AI) tasks with their cloud-based graphics processing units (GPUs). CoreWeave, previously a cryptocurrency mining company, mainly serves larger companies. DigitalOcean splits its servers into "droplets" for smaller businesses and developers. Each should be in a good position to profit from the explosive growth of the AI market. However, investors are clearly more bullish on CoreWeave, which went public at $40 in March but now trades at around $125. DigitalOcean trades at $29, which is nearly 40% below its initial public offering price of $47 from March 2021. Let's see which is the better cloud AI stock. The differences between CoreWeave and DigitalOcean CoreWeave was once an Ethereum (CRYPTO: ETH) miner, but it abandoned that business model in 2018 and started using its GPUs to remotely process AI tasks. In 2022, it spent about $100 million to install Nvidia's (NASDAQ: NVDA) H100 GPUs in its data centers, and it used those GPUs as collateral to secure more funding to build additional data centers. It subsequently attracted investments from Nvidia, Cisco, and other tech giants. Today, CoreWeave operates 33 data centers across the U.S. and Europe -- up from just three centers at the end of 2022. Its top customers include Microsoft (NASDAQ: MSFT) and OpenAI. DigitalOcean's cloud infrastructure platform, which provides remote storage and computing power, is similar to Amazon Web Services and Microsoft Azure. 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DigitalOcean's acquisition of Paperspace gave it a foothold in the AI market, but its non-AI cloud services aren't growing as rapidly. Second, CoreWeave locked in huge customers, like Microsoft and OpenAI, that could afford to quickly ramp up their spending on its cloud-based GPU services. DigitalOcean served smaller developers and small-to-medium-size businesses -- which paid less money to deploy their apps and sandboxes. Third, CoreWeave has taken on lots of debt and racked up steep losses to buy more GPUs and open more data centers. DigitalOcean has been prioritizing its profit growth over its near-term expansion, and its net income has stayed in the black over the past two years. Which stock has more upside potential? From 2024 to 2027, analysts expect CoreWeave's revenue to grow at a CAGR of 106% to $16.7 billion as it turns profitable in the final year. They expect DigitalOcean's revenue to increase at a CAGR of 14% to $1.2 billion as its net income rises at a CAGR of 29% to $179 million. CoreWeave's projected growth trajectory looks incredible, but that expansion will likely be driven by a lot of debt and secondary offerings. Yet with a market cap of $63.5 billion, it doesn't seem that pricey relative to its growth potential at 13 times this year's sales. DigitalOcean, with a market cap of $2.7 billion, might seem a lot cheaper at 3 times this year's sales. But it's trading at that discount because it's growing at a much slower rate. Its conservative AI strategy also isn't attracting as much attention as CoreWeave's all-in expansion. So for now, CoreWeave still looks like a better play on the cloud and AI markets than DigitalOcean. Its business strategy is risky and aggressive, but it could generate much bigger long-term returns for its investors than DigitalOcean's less ambitious approach. Should you invest $1,000 in CoreWeave right now? Before you buy stock in CoreWeave, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and CoreWeave wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!* Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Cisco Systems, DigitalOcean, Ethereum, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Better Cloud AI Stock: CoreWeave vs. DigitalOcean was originally published by The Motley Fool

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