Diamond cooling mania: How a $7 billion rally ran ahead of the facts

Nvidia's Jensen Huang took the CES 2026 stage and said something that sent shockwaves through the cooling industry. "We're basically cooling this supercomputer with hot water."

He was talking about 45–degree liquid loop cooling for Vera Rubin NVL72 – a 100% liquid–cooled platform drawing 2,300 watts per chip. He did not mention diamonds. Not once.

But in China, the story took on a life of its own.

The game of telephone

On January 28, a Chinese diamond materials company called "C Y Diamond" posted a photo on its official WeChat account: its CEO shaking hands with Huang in Beijing. Then business and tech media outlets ran with it. Caixin, 36Kr, Sina Tech – all reported that Nvidia had "verified" diamond composite materials and would "fully adopt diamond cooling." Brokerage reports went further, tying diamond cooling directly to Nvidia's next–gen GPUs and projecting an 87–billion–yuan ($12 billion) market by 2026.

In China's stock market, an index related to lab–grown diamond surged 71% in five months. Eight stocks added 49 billion yuan ($7 billion) in market cap. Four stocks – Liliang Diamond, SF Diamond, Huanghe Whirlwind and Worldia Diamond – more than doubled.

To date, Nvidia's official website, English–language tech media and investor relations releases contain zero confirmation of any "diamond cooling" plan.

What the numbers say

The facts tell a colder story.

Liliang Diamond told the stock exchange that diamond thermal materials have "not yet reached the stage of large–scale commercialization" and have had "no material impact" on revenue. SF Diamond disclosed one overseas client and said the bottleneck is simple: not enough orders. Huifeng Diamond issued a statement saying its thermal products account for 0.15% of total revenue.

At least 26 companies, most located in central China's Henan Province, are chasing this market. Most have samples. Almost none have revenue.

Two paths, one problem

The industry is split between two technical routes. Diamond composite materials cost three to four times more than traditional copper but are closer to commercial reality. Pure CVD diamond heat sinks, meanwhile, still faces fundamental challenges – thermal expansion matching, polishing, packaging, etching – that put mass production years away.

The problem is that most Chinese producers use HTHP, a cheap method suited for jewelry, not semiconductor–grade thermal management. The pivot from jewelry–grade CVD to semiconductor–grade CVD is not just a process upgrade – it is an identity shift from consumer goods to advanced manufacturing.

To be clear: diamond cooling is not fiction. US firm Akash Systems delivered diamond–cooled H200 servers to a real customer. Intel CEO Lip–Bu Tan confirmed an investment in a diamond wafer company. Huanghe Whirlwind's 8–inch diamond heat sink line is running at full capacity.

The real problem is that the market priced in a 2027 story two years early. Behind the headlines of "Nvidia's diamond cooling," behind the soaring stock charts, behind the photo of a handshake – technology moves slower than narrative.

Huang cooled a supercomputer with hot water. Cooling a $7 billion rally might take something stronger.