🧊 What If Data Centers Didn't Need To Be Cooled?

In today’s newsletter I discuss what if data centers didn’t need to be cooled, Jennifer Garner’s company Once Upon a Farm IPOed, Alphabet just raised $30 billion dollars by selling 100 year bonds in the UK, Scientists detected a radio signal from 13 billion light years away, the toilets don’t lie, NBC saw the most amount of viewers ever tuned in for the opening ceremonies of the Winter Olympics, and MrBeast just bought a bank!

Let’s get into it!

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🧊 What If AI Data Centers Didn’t Need To Be Cooled?

What if AI data centers didn't need to be cooled? We might be closer to that dream than you think, with new AI chip cooling breakthroughs from Nvidia, innovative projects like Microsoft’s undersea data center experiments, and space-based AI data center satellites from Elon Musk’s SpaceX AI. Let’s get into it.

Think about the last time your laptop got so hot it felt like it'd melt a hole through your desk. Now imagine that on the scale of giant AI data centers that companies are spending billions of dollars to keep thousands of computers and AI chips from bursting into flames. But what if in the future we didn’t need to cool AI data centers? Companies worldwide are projected to spend approximately $18-$27 billion dollars annually on data center cooling solutions as of 2025, with the mercury rising as high as $40-$50 billion dollars by 2030–2032.

Investors have been betting that the only way to fix this heat problem is with massive liquid cooling systems that suck up even more massive amounts of electricity. Now a couple of heavyweight tech CEOs have come up with some, let’s say novel, approaches to lowering the amount of electricity needed to cool data centers, and some of their ideas are out of this world.

First up, let’s discuss Nvidia’s Jensen Huang, who may have just flipped an entire industry on its head during a recent talk he just gave about the future of Nvidia’s AI chips. Jensen Huang shared that Nvidia’s new chip architecture, called Vera Rubin, is so efficient that it doesn't need the intense liquid cooling infrastructure that most data centers use today to cool their servers in order to prevent them from overheating and melting. He explained that these new chips can handle even higher temperatures than previous models, and that the water going into these systems can stay at 113 degrees Fahrenheit without needing a massive water chiller to cool it down. This revelation's a big deal in the data center industry, because chillers are one of the most expensive parts of a data center’s cooling setup.

Jensen Huang described how this architecture is designed to reduce the cost of running AI chips by 10X compared to older model chips. The Vera Rubin GPU features 336 billion transistors, and uses an advanced processing node for efficiency. Jensen Huang’s speech focused on what he called speculative decoding, which helps the chips process information faster without using more power. If Jensen Huang can deliver a chip that performs this well without needing a total redesign of data centers then the cooling industry is in trouble.

Investors have been pouring money into companies that make this specialized equipment in order to keep up with the demand from AI data centers, but now those investments might be on the verge of being obsolete. Jensen Huang shared that he sees a future where AI data centers might be much simpler and cheaper to design, build, and operate than the current generation of AI factories. The financial markets responded instantly with huge drops in stock price from some of the biggest names in data center cooling, like Vertiv Holdings, Modine Manufacturing, Trane Technologies, and Johnson Controls. Now an entire sector of the economy is feeling the pressure all thanks to the vision of Nvidia’s Jensen Huang.

Microsoft’s Project Natick was ahead of its time. The project’s subsea engineering pushed the boundaries of edge computing by submerging a self-contained data center 117 feet below the surface of the North Sea in the Orkney Islands off the coast of Scotland, UK. The data center, known as the Northern Isles, was a 40-foot-long steel pressure vessel packed with 12 racks containing 864 servers and 27.6 petabytes of storage, which was completely powered by a 100% renewable grid of wind and tidal energy from the Orkney Islands. What made it truly ahead of its time was its "lights-out" operating philosophy. By replacing corrosive oxygen with a dry nitrogen atmosphere, and utilizing the ocean’s thermal mass for passive cooling through submarine-style heat exchangers (read: no massive energy-hungry cooling required), Microsoft achieved a Power Usage Effectiveness of 1.07 (sometimes I like to just throw in technical numbers to impress you). The results were beyond what anyone could have projected. Without human interference, humidity, or oxygen-induced oxidation, the underwater servers failed at only one-eighth the rate of their land-based counterparts, proving that the most stable environment for high-performance silicon might actually be the silent, high-pressure depths of the ocean.

Now let’s talk about an idea to cool AI data centers that’s out of this world. In a newly proposed Orbital Data Center initiative, which was just revealed in a FCC filing, Elon Musk’s SpaceX is planning to design, build, launch into space, and operate a constellation of up to 1 million AI data center satellites. The plan represents a radical shift in high-density computing by moving AI workloads into the ultimate "lights-out" environment - space! Each satellite is designed to act as a modular computing node, targeting approximately 100 kilowatts of AI processing power per ton, fueled by high-efficiency solar arrays that enjoy near-constant exposure to the sun in specialized sun-synchronous orbits. To handle the extreme thermal output of AI chips, which on Earth require millions of gallons of water for cooling, SpaceX plans to leverage the -455°F temperature of the vacuum of space as a "limitless" heat sink. The system utilizes massive, deployable radiative panels to circulate specialized coolants, dumping waste heat as infrared radiation into space. This space-based AI data center architecture not only bypasses the Earth-based power grid's limitations, but also eliminates the need for atmospheric cooling, which could theoretically allow for a Power Usage Effectiveness approaching 1.0, which would be lower than that which was achieved by Microsoft’s undersea data center Project Natick. SpaceX is positioning orbital space as the most cost-effective location for the next generation of massive AI data center satellites.

The race is on to lower the cost of cooling AI data centers, whether it’s through new AI chip breakthroughs, undersea cooling, or space-based AI data center satellites, it’s clear the industry is racing toward a future where AI data centers are more efficient and cost less to operate.

Quick Hits

💷 Business

Alphabet, which owns Google, just issued $30 billion dollars in bonds using pounds sterling to attract international investors who are willing to wait for the bonds to mature in 100 years in order to be fully paid back. 100 years! So why did they sell the bonds in the UK? To take advantage of lower interest rates in the UK, while meeting the demand of pension funds for ultra long duration assets in Europe. The bond offering was oversubscribed by 5X! This is one of the first of 5 trenches of bonds that Alphabet will be selling in order to raise billions of dollars this year as they continue their AI data center build out.

And it’s not like Alphabet doesn’t have money of their own. They’re sitting on a cash reserve of over $160 billion dollars, but they got such a good rate on the bonds by selling them in the UK to hungry European investors that they couldn’t pass up this good of a deal.

With Alphabet’s $30 billion dollars 100 year bond offering over subscribed, the global financial markets have demonstrated incredible trust in the long-term stability of Alphabet, even though the company will take the next 100 years to pay off these bonds in full.

Now that’s some financial trust!

👩‍🌾 Entertainment

Jennifer Garner’s organic food company Once Upon a Farm just raised $198 million in their Initial Public Offering, and now sports a market valuation of $724 million dollars. The company was first created by Cassandra Curtis and Ari Raz, and later brought on Jennifer Garner, who sits on the board and appears in ads for the company, and is also known in the company as "Farmer Jen", as well as John Foraker who serves as the company’s CEO. Once Upon a Farm brings in over $150 million dollars in annual revenue through partnerships with large retailers including Target, Walmart, Whole Foods Market, Kroger, Publix, and Wegmans.

Once Upon a Farm plans to use this new funding to scale their production of healthy snacks and meals for children, which is a market segment that was worth $6.57 billion in 2024 and is projected to grow to $12 billion by 2035.

Can we just talk about how awesome of an actress, mom, and entrepreneur Jennifer Garner is!

🛰️ Space

Scientists have just detected a radio signal that lasted 10 seconds from a galaxy located 13 billion light years away. The mysterious signal repeats with a clear periodic pattern every 0.2 seconds. Lead researcher Daniele Michilli and his team used the Canadian Hydrogen Intensity Mapping Experiment telescope, which cost approximately $9 million dollars to build, to capture the signal’s data. Sadly, this isn’t an alien signal, unfortunately. On a brighter note, this signal does provide new information for researchers as they study the origin of these massive energy releases from distant universes in order to better understand how neutron stars and magnetars produce these bursts of power in deep space. So again, no alien signal. You can take off your aluminum foil hats.

🏦 Banking

Jimmy Donaldson’s company, better known to the world as MrBeast and Beast Industries, has  acquired the financial tech application Step, which is a banking-as-a-service app designed for teens and young adults (think: Gen-Z and Gen Alpha). Step serves over 5 million users, and has previously raised $175 million dollars from VC firms Coatue, General Catalyst, Stripe, Collaborative Fund, and Crosslink Capital, and from celebrity investors like Charli D'Amelio, Stephen Curry, Justin Timberlake, Will Smith, The Chainsmokers, and Eli Manning.

CJ MacDonald, who founded Step, will join the team at Beast Industries to help expand financial literacy tools for younger generations. This acquisition brings together the massive audience of MrBeast, with a platform that has processed billions of dollars in transactions to create a new ecosystem for digital banking and commerce.

You know what would be cool? If MrBeast did one of his $1 million dollar challenges to see how much teens could save up with the Step app. Teaching the next generation to be frugal and learn to save could be one of MrBeast’s greatest accomplishments in life. 

🚽 Interesting Stats

What if I told you that a record number of Americans held it in until after they watched Bad Bunny perform at the Apple Music Super Bowl Halftime Show? How do I know? Well the folks over at New York City’s Department of Environmental Protection (DEP) just reported that NYC saw a dramatic decrease in the amount of water consumed during the Super Bowl Halftime Show, and then saw the equivalent of 761,719 toilets flushing right after Bad Bunny performed. 

Say what you will about the Super Bowl Halftime Show, but the toilets don't lie.

🏅 Olympics

The Winter Olympics opening ceremonies have kicked-off in Milan and Cortina, and averaged 21.4 million viewers across NBC and the Peacock platform, which is a 34 percent increase from the previous 2022 Winter games in Beijing, which averaged 15.9 million viewers. Over 3 million people watched the event on the Peacock streaming service, making it the most streamed Winter Games opening ceremony in history. This viewership total includes preliminary Nielsen data and streaming numbers, and represents the most watched Winter Olympics opening ceremonies in many years for NBA. It also reflects a significant growth in audience engagement for international sporting events. It also doesn’t hurt that we’re freezing our butts off here in Upstate New York, and we’re willing to watch literally anything while we’re curled up on the couch trying to stay warm this Winter!

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The Business Behind The News is written, edited, and published by Chris Thompson.