Key Points:
- Google is discussing buying liquid cooling equipment from Chinese firms like Envicool.
- Liquid cooling is crucial for AI data centers due to high heat generation.
- The talks highlight tight supply in the AI infrastructure market and China’s growing supplier role.
- Envicool showcased a CDU built to Google’s specifications and plans capacity expansion.
Alphabet’s Google is in discussions with Chinese companies, including Envicool, to purchase liquid cooling equipment for its data centers. This move comes as high-density computing in AI data centers generates significant heat, making traditional air cooling systems insufficient. A procurement team from Google’s Taiwan operations recently visited China, highlighting a tight supply of these crucial cooling parts.
Liquid cooling systems, which circulate water or other liquids around equipment, are becoming essential for managing the heat produced by powerful AI infrastructure. Without effective cooling, these advanced systems can overheat and fail.
During their visit this month, Google’s team met with Envicool, according to sources familiar with the discussions. The team also plans to meet with at least one other Chinese firm. Neither Google nor Shenzhen-based Envicool have commented on these talks.
These discussions reveal a broader trend: the global rush to build AI data center infrastructure is straining the supply of not only advanced chips but also less complex equipment. It also shows the increasing importance of Chinese suppliers in the global data center market, even amidst ongoing tensions between the U.S. and China.
Envicool, established in 2005 and boasting a market value of 98 billion yuan ($14 billion), saw its revenue jump by 40% in the first nine months of this year. The company recently showcased a coolant distribution unit (CDU), a vital component for liquid cooling systems that sends coolant to server racks, built to Google’s specific requirements.
A Goldman Sachs report, following a recent analyst call with Envicool, indicated that the company expects its liquid cooling revenue to grow quarterly this year. This growth pipeline includes potential orders from Google for its fifth-generation CDUs and other components. Envicool also plans to expand manufacturing capacity at a new factory in Guangdong province, alongside facilities in Thailand and the United States.
The liquid cooling market is quite diverse, with many suppliers offering different parts for these systems. Chinese suppliers have steadily gained ground, boosted by strong domestic demand. Numerous data center projects within China have helped these companies increase production volume and lower costs. Other leading Chinese suppliers include Lingyi iTech and Feilong Auto Components, as well as server makers like Lenovo.
