Water. Right now, that simple yet crucial resource is the number one problem for data centers and AI companies alike – and Nvidia has a solution. At least, for the cooling part of it.

Let’s dive into the data center water problem, why it is such a pressing issue, and how Nvidia’s latest technology could save millions of gallons of the world’s most precious resource.

Introduction | The Problem | The Solution | The Caveats

Reading Time: 7 minutes. This won’t be super long, so stay tuned.

The Problem

Data centers use a lot of electricity. A single, mid-sized data center runs continuously with a steady demand of 5-20 megawatts (MW). Larger data centers use up to 100 MW at any given time, while hyperscale data centers, like those utilized by tech giants, can maintain a demand of as high as to 1,000 MW, equivalent to 1 gigawatt.

By comparison, a nuclear reactor consistently produces around the same amount of energy – but there’s a crucial difference. The United States has 94 nuclear reactors, as opposed to the nation’s 750 hyperscale data centers.

Within these data centers, 99.9% of the electricity consumed by a GPU is converted into thermal energy. This means that a single graphics card operating at peak wattage can generate up to 450 watts of heat under load, while an entire, AI-capable server rack can emit as much as 100,000 watts of thermal energy continuously. Multiply those numbers by thousands of GPUs, and you end up with staggering statistics.

GPUs themselves operate at a temperature between 150°F (65°C) and 185°F (85°C), but ensuring that they do not exceed that threshold is crucial. Without proper cooling management, GPUs begin thermal throttling, where they systematically slow down or halt operations to prevent overheating. Even then, continued exposure to heat levels above 200°F (94°C) can damage or even melt many AI-level GPUs, which cost upwards of $50,000.

Furthermore, a study conducted by researchers from various institutions, including Cambridge University, found that the facilities even have their own “data center heat island effect.” The report found that the land area around data centers rose in temperature by around 3.6 degrees Fahrenheit (2 degrees Celsius), while certain locations saw an increase of as much as 16.4 degrees Fahrenheit (9.1 degrees Celsius).

For these reasons, proper cooling infrastructure is crucial. Currently, data centers utilize water for this purpose, but their needs are constant and immense. A large data center uses 1-5 million gallons of water a day, equivalent to the daily water usage of a town with 10,000 to 50,000 people.

This water is cooled using large industrial chillers and then circulated through massive, noisy cooling towers, but the chips’ intense heat emissions cause the liquid to evaporate immediately. This prevents data centers from utilizing a closed-loop system – instead, the water they consume is immediately emitted into the atmosphere, depleting local water supplies. As much of the United States continues to face extreme drought conditions, data centers suck up water that is crucial to communities facing these situations.

However, Nvidia may have just changed the game.

The Solution

Nvidia recently announced the arrival of their latest round of next-generation chips – the Vera Rubin platform. Utilizing the brand-new Vera CPU and Rubin GPU, Nvidia’s latest technology can provide technology companies with an incredible return on investment. The company estimates that for every $100 million invested, corporations could make more than $5 billion in revenue, thanks to the new system’s upgraded attention mechanisms and highly efficient computing power.

The key element in this development, though, is the infrastructure around Vera Rubin. Alongside the release of the new chips, Nvidia will provide companies with the Vera Rubin DSX AI Factory reference design, which serves as a blueprint for data centers that use the technology.

This design dictates how to organize the server racks, run power distribution, and, most importantly, manage cooling infrastructure. And, included in the Vera Rubin DSX, could be the solution to data centers’ cooling problems.

The DSX utilizes a closed-loop system filled with a mixture of 75% water and 25% propylene glycol. This combination, when circulated inside a sealed system, prevents water evaporation and ensures that the same liquid continues to cool the chips without the need to replenish the fluid.

Additionally, this coolant is not cold, contradicting the name. Instead, Nvidia’s coolant mixture enters the server racks at a warm 113°F (45°C), eliminating the need for large chillers to cool down the circulating liquid. The Vera CPU and Rubin GPU are engineered to run safely even when supplied with warmer fluids, allowing the mixture to enter at 113°F (45°C) and exit at 131°F (55°C).

Then, the coolant travels to a set of dry coolers on the outside of the building, which are essentially giant industrial car radiators with massive fans. The mixture, which would be at a temperature of 131°F (55°C), is already much hotter than the air outside, allowing it to rapidly shed heat without requiring massive rows of dry cooling fans.

Then, the fluid is circulated back into the data center to re-cool the servers.

This reduces data centers’ water needs for the purpose of cooling to almost zero, allowing them to minimize water consumption. Furthermore, alongside the financial savings for eliminating water-based cooling, data centers will be able to save millions of dollars in electricity costs – rather than paying for expensive mechanical chillers and noisy evaporation towers, investing in dry coolers drastically reduces infrastructure needs.

The Caveats

Of course, there are always drawbacks.

The first and most significant of these shortcomings is the fact that the new strategy only applies to the water consumption of data centers themselves.

Fossil fuel power plants, which include coal and natural gas-based facilities, use more than 2.7 billion gallons of water per day, according to the US Geological Survey, and they supply more than half of all electricity used in data centers.

In order for AI companies to truly minimize their overall water usage, they must also invest in energy sources that use less water – and this doesn’t just mean renewable energy. Even nuclear power plants maintain extremely high water usage demands. Other sources, like hydropower and solar power, consume almost no water, making them an ideal choice for an industry looking to minimize its overall water consumption.

The production of the semiconductor chips used in data centers is also incredibly water-intensive, using thousands of gallons of water in the manufacturing process of a single chip. AI companies must invest in more efficient strategies to produce these semiconductors to further reduce their environmental impact.

Another major drawback is that the DSX only applies to new data centers that are yet to be constructed. Data centers that have already been built cannot possibly integrate new cooling infrastructure without the destruction of the entire facility, which is nearly impossible and raises costs exponentially.

Additionally, the Vera CPU and Rubin GPU are specifically engineered to withstand warmer overall temperatures, allowing this cooling strategy to work. However, data centers that contain older Nvidia chips or GPUs from other companies will continue to maintain their current water consumption.

Finally, Nvidia has confirmed that their new technology also depends on the geographical location of the data center. Facilities in tropical or desert areas could require traditional, mechanical chillers during the hottest parts of the year, when air temperatures could approach or exceed the 113°F (45°C) temperature of the water-glycol mixture.

There is a lot more to this story than just the initial headline. Yes, semiconductor and electricity production will maintain massive water demands. Yes, the architecture will primarily apply to new developments, and it will not be a perfect solution for every geographical region.

But Nvidia’s breakthrough in liquid cooling is still a vital step forward for AI and society as a whole. It proves that engineers driving the artificial intelligence boom are not entirely ignoring the planet’s environmental needs. If this cooling strategy becomes the new standard for the industry, it could mark the first major shift toward sustainable artificial intelligence.

While data centers are unlikely to ever reach zero water consumption, minimizing usage should be the ultimate goal – and the industry is building the tools to get there.

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Let’s dive into SpaceX itself, today’s IPO, what investors were expecting, and how markets actually moved.

If you’re not an expert in finance, don’t worry about it. Your money matters too. We’ve covered all the basics, so you can engage with markets without the hassle.

Note that this article is not financial advice – at Your News Hub, we’re focused on giving you all of the information so you can make a decision. Instead of sending you searching across hundreds of paywall-blocked articles, we’ve summarized everything you need to know, complete with definitions, facts, statistics, and graphs.

Introduction | History | The Three Divisions | The Lead-Up | Why Investors Were Bullish | Why Investors Were Skeptical | How the Market Moved | What This Means For Musk | What This Means For SpaceX

Reading Time: 11 minutes. Grab a coffee – we’re breaking down everything you need to know about today’s historic SpaceX debut.

Introduction

In this article, we’ll be covering:

• The history of SpaceX

• The company’s corporate structure and how it influences investor sentiments

• The lead-up to the IPO, including investor predictions

• How markets actually moved

• How this benefits SpaceX founder and CEO Elon Musk

• What this means for the corporation as a whole

History

Founded in 2002 by now-trillionaire (yes, trillionaire – keep reading for more) Elon Musk, the company has quickly become NASA’s go-to source for mission planning and space innovation.

In 2015, SpaceX landed the first-stage booster of the Falcon 9 rocket back onto a launchpad at Florida’s Cape Canaveral, establishing that rockets could now be reused – a feat that has only been achieved by a handful of companies to this day.

In 2019, SpaceX’s Falcon 9 rockets launched their first Starlink satellites into space, revolutionizing the telecommunications industry. Today, Starlink Roam can be accessed from even the most remote places on Earth, and it has proved to be a crucial resource for troops fighting in eastern Ukraine against Russia.

Then, in 2023 and 2024, SpaceX began testing Starship, a staggering 407-foot-tall rocket with a payload of over 100 tons. On their fifth test, they successfully caught the monstrous Super Heavy booster in midair, and continued Starship tests in 2026 have achieved additional milestones that are bringing the company closer to a future mission to the Moon or even Mars.

The Three Divisions

In February, SpaceX incorporated Musk’s AI company, xAI, into its corporate structure, creating a company with three essential divisions: telecommunications (Starlink), space exploration (SpaceX), and artificial intelligence (xAI).

Starlink, the telecommunications division, is where most of the company’s profit comes from, making up 61% of SpaceX’s total revenue in 2025. With an EBITDA margin of 63% and over 10.3 million subscribers across more than 160 countries, the satellite internet platform is incredibly lucrative and serves as the corporation’s only profitable division.

Meanwhile, their space exploration programs have received substantial government funding, but additional investments into new innovations and upcoming missions across the last few years have led to significant losses – in 2025, the division reported a net loss of $635 million.

Finally, the artificial intelligence portion of the company is currently the most unprofitable of the three, resulting in a $6.35 billion deficit in 2025. xAI has invested heavily into new infrastructure over the last few years, including massive data centers to support their latest supercomputer, Colossus.

According to SpaceX’s pre-IPO S-1 filing, xAI accounted for just 17% of the company’s revenue while eating up 61% of capital expenditures. The division has also failed to gain traction against the battle for market share against other corporations like OpenAI, Alphabet, and Anthropic, leading to the aforementioned losses.

However, investors have pointed out that the leasing of the company’s infrastructure capabilities could become a highly profitable sector of the business in the near future. Just last month, xAI secured a major deal with Anthropic to lease the entire Colossus 1 supercomputer – including over 200,000 Nvidia graphics processing units – to assist in the training of Claude, garnering them around $1.25 billion per month.

The Lead-Up

An initial public offering, or IPO, requires a filing in advance by the company, who must disclose various statistics ahead of time to inform investors of its potential. Then, the day before the official IPO, the allocated shares are pre-sold to accredited investors – usually large banks and financial institutions – who sell those shares on the day of the IPO.

Following months of pitches to major sovereign wealth funds and prominent investors, SpaceX had settled on a final price-per-share of $135, setting their target valuation at $1.77 trillion – that figure would have made them the sixth-largest company by market capitalization in the world. Large corporations typically target a price range, rather than releasing a specific share price ahead of the public offering. This led to significant deliberation over the company’s true valuation, which intensified after the market response proved to be even bigger than SpaceX expected.

Beginning today, investors would be able to purchase the new stock under the ticker SPCX. Yesterday, as part of their pre-IPO sales, SpaceX allocated around 30% of their total ownership to retail – a relatively high percentage for a public offering, given that most companies just put up around 10-20% of their total equity for individual investors.

The remaining 70% was sold to the aforementioned accredited investors, as is traditional the day before an IPO.

At a price of $135 per share, SpaceX pre-sold all 555.6 million shares for a total of $75 billion – shares that hit the public market today. However, investor reports indicated that the market was willing to pay as much as $250 billion for the shares, led by major institutions like BlackRock – the asset manager alone accounted for the sale of over $5 billion in shares.

ARK, an investment management firm, believes that the company could reach a $2.5 trillion valuation by 2030.

Not all investors were convinced, though.

Prior to the IPO, Morningstar, a global private equity and venture capital firm based out of Hong Kong, valued SpaceX at just $780 billion – less than half of their projected valuation.

Why Investors Were Bullish

Many investors remained bullish on the stock, leading to heavy oversubscription ahead of the IPO; unlike other corporations, which typically have a ceiling on projected growth, there is no way to probabilistically determine the future growth of SpaceX. The company, essentially, has limitless upside, with projects like Starlink and Starship making progress alongside a host of upcoming government contracts with NASA. Space is an uncharted, boundless market, and demand for space exploration will not stop anytime in the near future.

Reports show that SpaceX launches are responsible for the deployment of around 85% of all active satellites, and launch costs themselves have decreased more than 95% since 2008.

According to SpaceX’s pre-IPO S-1 filing, the company reported around $6.58 billion in adjusted EBITDA in 2025 against a total revenue of $18.67 billion, solidifying high EBITDA margins of around 35% – the traditional aerospace or hardware company maintains EBITDA margins of just 15-20%. This indicates that the company is highly efficient at converting revenue into profit – courtesy of Starlink.

Then, they looked at the company’s total enterprise value to increase accuracy. According to Morningstar, at the end of the first quarter of 2026, SpaceX had around $16 billion in cash and $30 billion in debt, with the majority of that debt coming from recent investments in data centers within the AI division. Factoring in the $75 billion cash inflow from the IPO, the corporation’s total enterprise value – one of the truest measures of a company’s value – comes out to around $1.71 trillion.

Combining these two statistics results in an EV/EBITDA – used to compare current profitability and the company’s total value – of approximately 260x. The average ratio is between 8x and 30x. This means that current investors are relying heavily on forward P/S and future revenue streams, with some projections showing that SpaceX could achieve massive profitability as soon as 2028 or 2029.

However, it can also signal that a stock is extremely overvalued or is facing a critical bubble. According to Fortune, realistically justifying their $1.77 trillion valuation would require the company’s revenue to skyrocket to over $1.1 trillion in 2035 – an average growth rate of 50% year-over-year, which has never been achieved by any company in history.

Putting that into perspective, $1.1 trillion in revenue would be approximately 2.4% of the US GDP in 2035.

Why Investors Were Skeptical

Despite their high EBITDA margins and $18.67 billion in 2025 revenue, SpaceX reported a net loss of $4.9 billion on the year due to heavy investments into R&D and innovation.

Additionally, at SpaceX’s projected valuation of $1.77 trillion, the company would have an astronomical P/S ratio of 95x. The average P/S ratio for public companies is between 1x and 4x, with large tech or artificial intelligence corporations leaning closer to 10-20x. For example, Alphabet has a P/S ratio of around 10.8x, while Nvidia’s is approximately 19.3x.

Most skeptics expressed concerns about the company’s valuation being artificially inflated by their self-imposed restriction on available equity. Data shows that SpaceX sold just 5% of equity to investors via Class A shares during today’s public offering – an incredibly small value for a company with such a staggering valuation. Other corporations, like Alphabet and Nvidia, have put up close to 100% of their total equity to be publicly traded, allowing investors’ voting power to directly match financial investment.

According to the S-1 filing, Elon Musk owns 5.57 billion Class B shares – around 93.6% of the total Class B shares available – alongside 849.5 million Class A shares. This gives him around 82% of the company’s total voting power, guaranteeing that he remains in control at all times. He can never be ousted as CEO, and he makes all final company decisions rather than a board of directors.

With just 5% of total equity up for sale, SpaceX is at a high risk of triggering extreme volatility, which could send the stock soaring or plummeting with the smallest shift in investor sentiment.

These factors, combined with the dangerous signals of the company’s sky-high EV/EBITDA, put off many experienced investors, who warned that the bubble was bound to burst.

How Markets Moved

Yes, it’s what you’ve been waiting for. What actually happened? How did markets move?

As expected, the first day of trading for SpaceX was a massive success. Due to heavy oversubscription – over four times the actual number of shares available – SPCX had already risen to $150 a share before it even began trading. The stock became available to buy at 10:00 am, and its price soared as high as $176 before cooling during the afternoon.

SpaceX closed out the day with a final price of $160.95 – a 19.22% increase from the initial price of $135 per share. That puts the company’s current valuation at $2.11 trillion.

What This Means For Musk

The success in global markets, along with the company’s unique structure, has made Elon Musk the world’s first-ever trillionaire. Following the IPO, his net worth now stands at approximately $1.05 trillion, with his stake in SpaceX worth around $886 billion.

But, how is this possible?

Musk holds around 82% of voting power with his extensive ownership of Class B shares, corresponding to around 42% of total SpaceX equity. Take 42% of the current SpaceX valuation, add it to Elon Musk’s existing net worth, and there it is. The world’s first trillionaire.

What This Means For SpaceX

Despite the company’s record-breaking IPO, SpaceX is not in the clear. Data shows that major companies tend to suffer from serious dips following blockbuster IPOs.

The trend follows a common pattern, with the stock plummeting after an IPO to meet investors’ realistic expectations. Once this number is met, the price begins steadily climbing back up, with high-potential corporations soaring past initial expectations in the long-term.

However, the debate remains whether SpaceX will actually enter that successful period after the projected dip. Long-term investors are counting on the company’s ability to deliver, despite current unprofitability, but others remain reluctant to rely on a company where the statistics are signaling extreme overvaluation.

Either way, it’s up to you, as the investor, to make the decision.

Realistically, do you think SpaceX is a $2.11 trillion bubble bound to burst, or are we looking at the first $5 trillion company by 2035? Leave your thoughts in the comments below.

Enjoyed this deep dive? Hit the like button at the top or bottom of this post so we know to keep breaking down big market events like this one!

The exhaust created by jet engines contains various greenhouse gases like nitrogen oxides, carbon dioxide, carbon monoxide, and water vapor. When the hot, humid exhaust mixes with the cold, dry atmosphere, the water vapor freezes, condensing around the soot from the engine and forming small ice clouds high up in the air.

These cirrus clouds form an expansive white line that follows the path of the plane for minutes, hours, or even days. Contrails tend to disappear quickly in dry conditions, humidity increases their chances of lasting longer. Specific high-humidity areas known as Ice Super Saturated Regions (ISSRs) can allow contrails to spread and merge with other cirrus clouds, creating massive blanket clouds that can cover thousands of square miles.

While these contrails can be beautiful to admire, they have a devastating impact on the environment, particularly at night. Like any other cloud, contrails trap heat inside Earth’s atmosphere. On the other hand, due to the white color of the clouds, contrails also reflect sunlight back towards space, meaning that they actually have a net cooling effect during the day.

At night, however, there is no sunlight hitting the Earth at that point. This completely removes the reflecting properties – without sunlight, the contrails do nothing but trap heat in Earth’s atmosphere.

Over the past few years, environmentalists and scientists have raised concerns over contrails and the dangers they pose to the global climate. Researchers are just beginning to understand these impacts, but they have already emerged as a silent but deadly environmental killer.

According to recent studies, the aviation industry accounts for around 2.5% of global carbon dioxide emissions, but around 4% of global warming can be attributed to the sector. Of this 4% share, two-thirds of it comes from non-CO₂ sources, with contrails as the largest contributor. Other studies have confirmed that the environmental impact of contrails is around two to three times as much as that of carbon dioxide, making it a major threat.

Furthermore, studies on aviation’s share of global warming have not taken non-CO₂ sources like contrails into account, suggesting that the industry’s net impact on the environment could be much larger than previously thought.

Despite these concerns, airlines have failed to acknowledge the dangers of contrails until now, and almost no action has been taken to stop them. However, there is a simple and easy solution, and airlines are already taking steps towards eliminating long-lasting contrails completely.

Further research has proven that around 80% of all contrails can be traced back to between 2 and 10% of all flights, suggesting that the problem’s cause is smaller than expected. Experts have confirmed that redirecting those 10% of flights to change their altitude slightly or adjust their flight path can eliminate a large portion of the contrails produced during that time – avoiding ISSRs is key to the process.

Airlines have already begun this process, analyzing planes that are already in the air and locating exactly which areas are most prone to contrail formation. While small changes in flight paths can cause small increases in CO₂ emissions, the contrail-induced warming impact that the process avoids is much, much greater. Additionally, flights that create contrails in the morning or midday can continue with their regular flight paths, as these contrails can actually reflect sunlight back into space and reduce their overall warming effect.

The Rocky Mountain Institute, a non-profit think tank dedicated to ensuring a smooth transition to clean energy, has already begun a massive project attempting to tackle contrails, involving various major players. They have brought together a cross-sector task force involving Breakthrough Energy, a climate-focused venture capital fund backed by billionaires like Bill Gates, Jeff Bezos, and Michael Bloomberg; Alaska Airlines, American Airlines, Southwest Airlines, United Airlines, and Virgin Atlantic from the airline industry; Airbus and Boeing from the airplane manufacturing industry; Flightkeys, an Austria-based flight planning software company; Google Research, which will help with analytics; and Imperial College London, who have already done several studies on the global impacts of contrails.

In particular, Google Research has brought artificial intelligence (AI) into the picture, assisting in the analytics portion of the project. Google’s researchers have already begun amassing weather data, satellite data, and flight data to locate ISSRs and detect contrails, with the rest of the team working to feed the data into an AI. The system then processes the information and advises pilots in real time, based off of their likelihood of creating a contrail. The pilots can then adjust altitude or flight path accordingly, minimizing contrail formation.

An initial round of the project was completed in collaboration with Breakthrough Energy and American Airlines in 2023, involving 70 test flights over six months – they saw a staggering contrail reduction of 54%.

Nevertheless, airlines are still a long way from implementing this on a more widespread scale, and regulations still need to be adjusted to account for the change in air traffic. In addition, while it is one of the fastest, most efficient ways to reduce the aviation industry’s climate impact, the plan will still require effort and cooperation from various major players.

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