And also came out of that conglomerate era, right? You know, the GE's, the what was the UTC's and others that had an amalgamation of many large businesses and some of them didn't have synergies, right? And so when you actually put it on its own, it can actually flourish and grow. Carrier's a great example of that. The amount of infrastructure spend around data centers globally is unlike anything that we've ever seen. The cooling requirements are significant. When you have a remote site, it's either real and in the drinking water or it's sort of metrics on a piece of paper that you could show people on a tour.
Welcome to the factory, doctor. I'm excited to have your Dave Gatlin on with us. Dave, welcome to the show.
Thanks, Alex. Appreciate it.
Let me tell everybody about your experience. I've been super excited about having you on. Carrier CEO and also a board member for the Boeing Company, which is super exciting. Previous to that, Collins Aerospace and part of the RTX companies. And it would be great to hear a little bit about that. And I think for a fun fact, I'm privileged to have Dave on because about probably 15 years ago, maybe 13 to 15 years ago, I had the honor of working with you, Dave, at the San Diego Hamilton Sunstrand site. And it was a great experience having got to know you. So, welcome to the show here. And tell our listeners a little bit about you and what you're doing.
Well, first of all, thanks for having me. And I'll tell you that experience for me when we worked together, you know, I think you were running our environmental controls business, the fans business at the time. And then I know you ended up going into the auxiliary power unit business, but I think in that '07 '09 time period, that was one of the best jobs I've ever had in my life. It was nice because we had about a thousand people and we were about 3,000 miles away from the mothership, the headquarters, and it was just a band of brothers and sisters trying to do great things in a business. So, I was very fortunate to work with you and to learn from you and always impressed with not only your tenacity to drive results for customers, but in a very disciplined way with a team and applying kind of process excellence. So, I always learned a lot from you and it was just great to recently reconnect with you, and it's so great to see how well you're doing.
Yeah, I know it was great to see you last year during your visit to Commerce when I was there, and it was great to see that. But, you know, one funny thing before we get going, I tell people that when I went into the auxiliary power unit program manager role, I tell people and you'll laugh at this about your Boeing experience right now. That was really the start of I feel like I've worked for Boeing every day of my career, but I've never worked for Boeing, right? And that whole APU 787 experience was an amazing one, but it was also you're working for Boeing, right?
Yeah, you feel that way because you want so much to do well for your customers.
But, also what was kind of funny is that my whole career was basically in aerospace. I started with United Technologies in the mid-90s. And since then, I've never done a resume. My whole career was not doing interviews, not doing a resume, kind of grew up in the United Technologies family between Pratt Whitney and the aerospace systems side, which today is known as Collins Aerospace. And well, what was funny about Boeing is we worked tirelessly to try to serve them as a customer, but we did have to get in pricing negotiations. And then after I moved over into Carrier as part of the spin, I leave aerospace. I then go back toeing the water into aerospace as a board member at the Boeing Company and I'm very proud to be on the board of such an important iconic company. But it is funny because now I'm on the other side of that in terms of those pricing negotiations. But not that I'm involved in negotiations, but it is funny to see that through the lens of what was then my customer.
Absolutely. Well, tell us as we get into some other questions here, but before that, tell listeners a little bit about Carrier and what you're doing and some of the exciting things there. And there's a lot around especially with like AI and cooling and what you're doing. So, it'd be great to hear just a couple minutes on that.
Sure. So, Carrier goes back to 1902. Willis Carrier invented modern air conditioning back in 1902. We actually spun and became our own public company because we were part of United Technologies for 50 years. We spun and became our own public company in April of 2020. So, I came over from the aerospace side of UTC to Carrier just as part of gearing up for that spin. And when you think back to April of 2020, it was right when COVID was going from being a Chinese phenomenon to being a global pandemic. So, we spun, we had $11 billion of debt, we had a billion dollars of cash, and our first quarter as a public company, our sales were down 25%. And what happened was frankly quite magical because our board, which was a new board because we were a new public company, and our management team, and all 50,000 people within Carrier, we all galvanized around our customers and each other and we ended up really creating something very dynamic and special. And we took the opportunity as part of the spin, we did change a lot of folks on the team, we did create a lot of energy, we did create a new culture that we called the Carrier way. It took us eight months, but we wanted to be very deliberate about that. A new operating system, Carrier excellence, we changed our process for developing products. We still have a disciplined passport process, but we modified that a bit. So, we ended up calling ourselves this 100-year-old startup because our legacy goes back over a century, but we wanted the energy of a startup. So, when we spun, we had three divisions. We had an HVAC division, a fire and security division, and a refrigeration business. And what we ended up doing was buying a big company in Germany for about $13 billion that does residential light commercial in Europe for HVAC, primarily heating. And then we sold one and a half of our businesses. We sold our fire and security business, and we sold half of our refrigeration business. So, we became very focused on HVAC and transport refrigeration, but we don't think of ourselves as an HVACR company. We think of ourselves as a thermal solutions type company. So, a focused portfolio, a new energy of a team, and now we just got to go try to make sure that we execute, service our customers, and I think we'll have an impact on the planet and our customers in a pretty profound way.
That's amazing. And I couldn't remember, but you took Carrier through the spin, right?
Oh, man. That must have been an exciting time.
Yeah, it was tremendous. You know, I learned a lot. I had not been a public company CEO. I'd been a segment president. It's very different being a public company CEO versus running a segment within a company. And it was great. Great experience. I'm sure I made a ton of mistakes and learned from those. But it was a really we kind of got forced into the fire because of the timing of when we spun. But I actually think in many respects it was a blessing because it really brought us relatively new team very close together.
Well, and also came out of that conglomerate era, right? You know, the GE's, the what was the UTCs, and others that had an agglomeration of multiple large businesses and some of them didn't have synergies, right? And so, when you actually put it on its own, it can actually flourish and grow. And Carrier's a great example of that.
It really is. There's so much benefit from strategic clarity, focus. It helps with capital allocation decisions. I actually think there were parts of Carrier that as part of UTC were under invested. So, some of our commercial HVAC business, we've invested quite significantly in that portfolio. We've improved the margins 3X. We've improved our share dramatically since we spun just 6 years ago. All this phenomenon around data centers which require so much cooling, we've been winning head-to-head. Our orders in the first quarter were up 500% because we can now focus our capital allocation on things that really move the needle for now just for Carrier and then within Carrier.
So, this data center and AI and put AI aside for a second, right? The data centers to drive it. That boom is real. Maybe before we get into other stuff, maybe can you give us your perspective on how that's really like how we see that when it affects GDP and that growth within the US. Give us maybe your perspectives on that.
Oh, it's tremendous. If you think about the amount of spend that the hyperscalers have, the Googles and Microsoft and AWS and Oracles and Metas, and then also the Colos. I met with one of the Colo providers that's always had about 5 billion and the CEO was telling me he just raised 50 billion and he's got to spend it soon. So the amount of infrastructure spend around data centers globally is unlike anything that we've ever seen. And if you think about the cooling requirements, we recently won a new commercial office building in Manhattan which is state-of-the-art and it has five chillers in it. We recently won a data center that has 160 chillers. So the amount of cooling required especially as the chips not only go from CPUs to GPUs but much more capable GPUs as you know, you look at Nvidia going from Blackwell to Bed Rubin the cooling requirements are significant. So it's a very exciting and unique phenomenon and we're positioned perfectly right in the middle of it. So a lot of our wins have started in the Americas. Two years ago it was a 500 million dollar business for us. Last year we doubled it to a billion. This year we've said it's going to be a billion and a half. So 50% increase. We're going to do better than that. We're pushing to do better than that. And then we're building up our backlog for 27-28. So it's a big growing business. The technology's changing a fair amount and we're trying to lead in that technology shift.
No, that's great. So, let's go over really quickly industry insight. Like, what are people not talking about that they should be? And then, we'll get into, you know, process, strategy, and a few other questions I have here. But, industry insight, right? What are we not talking about?
Yeah, the big shift that I think in our industry, and for us as a company, is it really grew up as a product business. You know, you would sell an air conditioning system for a home or for multi-family or for commercial office building or an airport. And now, a lot of the differentiation will go from not only you need products that are highly energy efficient and that meet certain acoustic requirements and footprint requirements, but you also need a lot of the differentiation will be through intelligence. So, you need to make sure the devices are connected and that they're easy to commission. You can aggregate data from multiple facilities. If you picture a customer, maybe a fast food chain that has facilities all over the place, or a retailer, they can aggregate data from multiple facilities into a single common data lake, and then you can apply agentic AI on top of that data lake to provide solutions with your customers, especially your scale customers. So, you're going from a product company to a thermal solutions company that really differentiates through systems integration and intelligence.
Amazing. The speed of which technology is changing these days is astronomically strict than it has been in generations before. So, we've talked a little bit about product. Let's talk about people, right? Because obviously, your products, even into the services and technology that you offer doesn't get completed without good people. So talk to us about your culture, your people, how you influence teams to achieve your business objectives and what are the core driving factors behind your workforce?
