'Without us, the data center industry would not exist,' says Vertiv CEO Giordano Albertazzi

[00:00:00] Speaker 1: Welcome back everybody. Vertiv Holdings, a maker of cooling systems for data centers, up 7% today after beating on the top and bottom lines for the first quarter. The company also revised its full year guidance higher. Shares on a monster run over the past year, up more than 640% thanks to the AI boom. Joining us now in an exclusive on the exchange is Vertiv CEO Gio Albertazzi. Mr. Albertazzi, welcome. Good to have you with us and congratulations on the numbers you reported yesterday. Those numbers were very strong. You're a kind of quiet player behind the scenes in this AI boom. Explain what you do and why your company is so central to what's happening in AI. [00:00:45] Gio Albertazzi: Well, first of all, thank you for having me today here. What we do is we power and cool the world's data. So every, behind everything we see digital, there is a data center. Indeed, there is a myriad of data centers around the world where everything digital is created. We have servers, there are servers in those data centers that require power and that require cooling because they generate a lot of heat. Everything from the grid to the chip, power transmission and power distribution and power management is something that we do. The entire power train as well as the thermal chain that manages the heat that is created. So without us, be it on the cooling or on the power side, without people like us, without us, the data center industry would not exist. So let me ask you an elementary school question. [00:01:46] Speaker 1: Why is data so hot? Why is it, why does it get so hot? [00:01:51] Gio Albertazzi: That's simply because you have a lot of power going into chips and other electronic components. And that is the power needed to compute. And when chips compute and other electronic components work, that generates heat. [00:02:07] Speaker 1: And are we talking about, I mean, and then another elementary school question for someone who doesn't understand this, like me, would be, OK, so you've got a data center and you've got all of these hot servers there generating electricity with chips and they're generating heat. And so why can't you just throw more tonnage of HVAC into the equation, more air conditioning? I assume what you do is far, far more complex and involved than just blowing cold air into a building. [00:02:39] Gio Albertazzi: It is more complex than that, indeed, but it is the entire end-to-end cooling and thermal management. But what happened in it was what is happening with the IT change, the AI acceleration, the artificial intelligence is a transition from traditional CPU-based servers to GPU, which have a much higher density. And that density makes them more faster. It makes them faster and more suitable for AI. But that generates more heat density and it's more difficult than to extract that heat and handle it. And that's where we come to play. And everything that is then downstream from that, getting rid of that heat. [00:03:31] Speaker 1: So, Vertiv, I mean, you've had an incredible run, 600% gain in the stock market over the past year. Let me ask you two questions. When you hear a report like today's from Meta, or was it yesterday, saying we're going to be investing heavily in data centers, does your pulse quicken? [00:03:51] Gio Albertazzi: We have been in the data center industry doing power and thermal for multiple decades. And we are very, very close to all the big players and every player in the market. So, we have a very strong and a clear view of what's going on. So, clearly, this is part of an acceleration on the data center infrastructure investment that we very strongly participate in. And, yes, when those news come out, kind of reinforce our belief and our view of the market. [00:04:22] Speaker 1: So, let me conclude with a question that I know all CEOs hate to answer, but I'm going to ask it anyway. Revenue guidance for the year was $7.54 to $7.69 billion. That's for your fiscal year this year. How big do you think this company can be in terms of revenues in five years? [00:04:43] Gio Albertazzi: We have given, at our last investor day in November, an indication of growth between 8% to 11% in the next few years. And that's based on a certain evolution of the market that we serve and AI. So, we believe that's still a very good projection for us. Let's see what the acceleration will be. [00:05:05] Speaker 1: 11% over five years would be close to a doubling, I think, if my math serves me right. Mr. Albertazzi, thank you so much for your time today and for explaining some concepts that this elementary school student didn't understand. Thank you so much. [00:05:18] Gio Albertazzi: Well, thank you very much.