The artificial intelligence (AI) boom is creating a new infrastructure race. Data centers need more power, cooling, and equipment to keep up with the latest chips. And companies like Vertiv (VRT +1.16%) and Eaton (ETN +1.12%) are both positioned to benefit, but which one is the better AI infrastructure play?
Vertiv is solving AI's power and cooling problem
As AI chips become more powerful, cooling and power delivery are becoming bigger problems. AI workloads are far more demanding than traditional computing, and GPU (graphics processing units) racks consume large amounts of electricity and generate substantial heat. As a result, traditional air cooling and conventional power systems just can't handle this much heat and power. That's where Vertiv comes in.
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The company provides power and cooling equipment that keeps compute hardware running around the clock. Its products include uninterruptible power supply systems, thermal management, and liquid cooling solutions.
NYSE: VRT
Key Data Points
But as AI racks become more dense, simply blowing air through a server isn't enough. Liquid cooling is becoming increasingly important because it can remove heat much more effectively than air cooling. This is where Vertiv comes in. Its MegaMod HDX platform combines direct-to-chip liquid cooling with air cooling and is designed for power-hungry AI systems.
More recently, the company also acquired Thermal Labs to strengthen its liquid cooling and cold-plate technology, and announced a $1.5 billion acquisition of UtilityInnovation Group to add behind-the-meter power systems and onsite generation. Now Vertiv is trying to help data centers solve the problem of getting enough power to the site in the first place.
But getting power to data centers could take years. So that's where another company comes in to tackle the power bottleneck.
Eaton is powering the AI boom from a broader angle
Eaton gives investors another way to ride the same trend. But instead of providing data center cooling, Eaton is a much broader power management company. Its products help customers control, distribute, and manage electricity across data centers.
NYSE: ETN
Key Data Points
AI data centers are pushing power requirements to levels that traditional electrical systems aren't equipped to handle. That's important because AI is creating a huge need for power infrastructure, from equipment inside data centers to systems that support the broader power grid. So Eaton is positioned across much of that chain.
Eaton provides electrical distribution, backup power, and other equipment to move electricity safely and reliably into these enormous facilities. On top of that, it's moving aggressively toward the next generation of AI power systems.
The company developed its own 800 VDC architecture designed around the power requirements of AI factories, while its Beam Rubin DSX platform was developed with Nvidia to provide an end-to-end power and cooling system for AI facilities.
Since building new power infrastructure and connecting it to data centers can take years, data centers need technology to deploy power systems more quickly and to provide alternative power sources and storage off-grid. Eaton is tackling this exact problem. Its AI strategy includes modular power, higher-voltage systems, and grid-to-chip solutions designed to accelerate power deployment in data centers.
Both Vertiv and Eaton are positioned to benefit from the AI infrastructure boom, but they offer investors different ways to play it, raising the question of which one is the better buy.
Which stock is the better buy for AI infrastructure?
Vertiv and Eaton stand to benefit as AI data centers demand more power and cooling. But Vertiv offers a more direct way to bet on AI infrastructure.
Eaton is a broader power management business, while Vertiv is more focused on the infrastructure surrounding AI compute, from power distribution and backup systems to advanced liquid cooling.
As AI racks become more powerful and data centers become more power-hungry, those needs are only becoming more important. So for investors who think the AI infrastructure boom still has room to grow, Vertiv could be the better way to bet on it.
