AAON (NASDAQ: AAON) says its cooling chiller system for Applied Digital (NASDAQ: APLD) handles the demands of large-scale AI data centers without consuming any water.
The waterless cooling solution represents a significant technical achievement, as data centers are traditionally among the heaviest consumers of water for thermal management purposes.
Applied Digital operates massive data centers in North Dakota, facilities that depend heavily on processors supplied by Nvidia (NASDAQ: NVDA) to power artificial intelligence workloads.
The extreme cold of North Dakota’s winters actually works in AAON’s favor, allowing the system’s compressors to shut off entirely and rely on outside air to handle the cooling load.
This approach, known as free cooling or economization, dramatically reduces energy consumption during the colder months that define much of the Northern Plains climate.
The ability to leverage ambient outdoor temperatures cuts operational costs for Applied Digital while simultaneously reducing the mechanical strain on AAON’s installed equipment.
Water-free cooling is an increasingly attractive proposition for data center operators facing scrutiny over their environmental footprint, particularly in regions where water resources are limited or politically sensitive.
AI infrastructure buildouts have accelerated sharply, driven by surging demand for the kind of high-density computing that Nvidia’s chips enable inside facilities like those run by Applied Digital.
AAON stock fell 4.86% on the day the report was published, while Applied Digital shares dropped 4.37% and Nvidia shed 1.64%, reflecting broader pressure across the AI infrastructure sector.
Despite the single-day decline, AAON’s ability to secure a technically demanding cooling contract in one of the country’s harshest climates signals strong positioning within the growing AI data center supply chain.
The North Dakota installations highlight how companies are rethinking traditional data center infrastructure, choosing locations where geography and climate can be turned into engineering and cost advantages.
