Vertiv Has An AI Tiger By The Tail

Vertiv Holdings is having a very good year, and the manufacturer of infrastructure and equipment for bit-crunching digital facilities has generative artificial intelligence, big-tech companies such as Google and Microsoft, and chip suppliers including NVIDIA to thank. Vertiv CEO Giordano (Gio) Albertazzi tells Chief Executive his company is making a big strategic bet on that gravy train’s continuing to roll.

The $7-billion-plus company based in Columbus, Ohio, recently posted third-quarter net sales of nearly $2.1 billion, up 19 percent over last year’s period, which was accompanied by an adjusted operating margin that surpassed 20 percent in the quarter. The main reason for both numbers is that the active and planned construction of data centers—both to power the growing cloud and to enable AI leaders to greatly expand their activities—is going through the roof, with many hundreds more now being planned for around the United States and the world.

Vertiv constructs new equipment and systems for providing high power density and thermal management to data centers to enable the vast computing demands of AI, most of which were nearly unforeseen as recently as two years ago, before ChatGPT and other genAI programs burst onto the scene. Vertiv’s liquid-cooling systems “are crucial for enabling AI,” Albertazzi tells Chief Executive.

Here’s how Albertazzi is taking advantage of the moment.

Assess the long term. Albertazzi acknowledges that the data-center market “is experiencing unprecedented growth due to AI” but says Vertiv “consider[s] this to be a trend that is here to stay due to several factors. These include the ongoing growth of cloud compute that has been trending upward for years, now with the layer of AI compute capacity on top of that.”

Lean in. “We are intensely cooperating with some of the industry’s leading chip manufacturers—including NVIDIA and Intel— and hyperscalers to accelerate the adoption of an AI-ready infrastructure,” he says. These partnerships “demonstrate Vertiv’s industry-leading technology to support AI deployment at scale today, and through these collaborations with key technology leaders, we are developing a robust pipeline of future-ready technologies.”

Among other things, the growth in demand for data-center energy-handling equipment has demanded that Albertazzi escalate Vertiv’s capex timeline to increase global manufacturing capacity. So Vertiv has added new manufacturing facilities in the Americas, Europe, the Middle East, Africa and Asia.

Look for add-on opportunities. Vertiv also is tapping into the moment by adding to its portfolio of power products with busbars, which are solid metal bars that carry large amounts of electric current from one place to another, as well as switchgear, a collection of electrical devices that protect, control and isolate power systems.

Also, Albertazzi says, there’s the potential for Vertiv to add more services related to the AI boom. “We are seeing some customers move toward wanting full-time, on-site service personnel at their data centers that are enabling AI, to ensure everything runs smoothly,” he said. “The value of an AI rack in the data center can be in the millions of dollars, and the data-center environment is becoming even more critical with high-performance compute, and also more unforgiving, given the intensity of AI applications.”

Tap into local resources. As it grows, Vertiv is taking more advantage of its location in central Ohio, where it has its global headquarters, a manufacturing plant and a customer-experience center. “We have been increasing our level of cooperation with Ohio State University to help ensure students’ education, including their curriculum and hands-on training, prepares them well for careers at Vertiv,” Albertazzi says.

The company also brings “more dollar and interest to the region,” he says, by bringing “customers of every size to our Ohio facilities to witness the quality of the equipment we are building for them.”