Google turns to Chinese suppliers for liquid cooling systems as AI data centers strain supply

Google in talks with China's Envicool, others to buy data centre cooling systems, sources say

BEIJING/SINGAPORE, March 17 (Reuters) - Alphabet's Google (GOOGL.O), opens new tab is in talks with Envicool (002837.SZ), opens new tab and other Chinese firms about buying liquid cooling equipment for data centres, according to people with knowledge of a visit to China by one of the U.S. firm's procurement teams. Liquid cooling systems - which circulate water or other liquid over or around equipment - have become critical in AI data centers as the high-density computing generates more heat than a traditional air cooling system can handle. The visit by the team from Google's Taiwan operations this month reflects tight supply of parts for such systems, the sources said. During the visit, Google's team has met with Envicool, said two of three sources, who were not authorised to speak to media ⁠and declined to be identified. The team also plans to meet with at least one other company, according to a separate source. Neither Google nor Shenzhen-based Envicool replied to Reuters requests for comment. The talks highlight how the global race to build AI data centre infrastructure has tightened supply of not just advanced chips but also lower-value equipment, as well as the growing role of Chinese suppliers in global data centre growth despite heightened U.S.-Sino tensions. HUGE MARKET GROWTH EXPECTED The global market for AI server liquid cooling systems is projected to surge to more than $17 billion in 2026 from $8.9 billion last year, driven by demand from Nvidia (NVDA.O), opens new tab and cloud providers deploying custom AI chips, according to a JPMorgan report. Envicool, founded in 2005 with a market value of 98 billion yuan ($14 billion), saw revenue surge 40% during the first nine ⁠months of the year. At a recent industry event, it showcased a coolant distribution unit (CDU), a critical component of liquid cooling systems that distributes coolant to server racks, built to Google's specifications. Envicool expects liquid cooling revenue to grow on a quarterly basis this year with a pipeline that includes potential orders from Google for its fifth-generation CDUs and other components, according to a Goldman Sachs report following an analyst call with the company this month. The ⁠company has also said it plans to expand capacity at a new factory in Guangdong province, while continuing to build out facilities in Thailand and the United States. The liquid cooling market is highly fragmented, with many suppliers providing different parts of such systems. Chinese suppliers have gradually gained traction, benefiting from ⁠strong domestic demand, as the country's many data centre projects have helped them boost production volume and lower costs. Leading suppliers include Lingyi iTech (002600.SZ), opens new tab and Feilong Auto Components (002536.SZ), opens new tab as well as server manufacturers such as Lenovo (0992.HK), opens new tab. In Taiwan, companies such as Foxconn (2317.TW), opens new tab, Auras (3324.TWO), opens new tab and Delta Asia (6762.TWO), opens new tab ⁠are major suppliers of such parts for Google in Asia. Other Chinese parts suppliers benefiting from AI data centre growth include makers of optical transceivers like Innolight (300308.SZ), opens new tab and Eoptolink (300502.SZ), opens new tab. Chinese manufacturers also dominate the printed circuit board market, with companies like Victory Giant Technology (300476.SZ), opens new tab counting Nvidia and Google as clients. ($1 = 6.8831 Chinese yuan) Reporting by Liam Mo and Miyoung Kim; Editing by Edwina Gibbs Our Standards: The Thomson Reuters Trust Principles., opens new tab

Google in talks with China's Envicool for data centre cooling systems - Reuters By Investing.com

Investing.com-- Alphabet's (NASDAQ:GOOGL) Google is in talks with Chinese firms, including Envicool (SZ:002837), to procure liquid cooling equipment for data centres, Reuters reported on Tuesday, citing people familiar with the matter. The discussions follow a recent visit by a procurement team from Google's Taiwan operations to China, reflecting the tight global supply of cooling components used in artificial intelligence infrastructure, the report said. Get real-time updates on market-moving news with InvestingPro Liquid cooling systems, which circulate fluids around computing hardware, have become essential for AI data centres as high-density workloads generate more heat than traditional air cooling can manage. Google's team met with Envicool and plans to hold talks with at least one other supplier, according to the Reuters report. The talks underscore how the rapid buildout of AI data centres is straining supply chains beyond advanced chips, boosting demand for ancillary equipment. According to JPMorgan estimates cited by Reuters, the global market for AI server liquid cooling systems could exceed $17 billion in 2026, highlighting strong growth prospects for suppliers.

Google in talks with China's Envicool, others to buy data centre cooling systems, sources say

BEIJING/SINGAPORE, March 17 (Reuters) - Alphabet's Google is in talks with Envicool and other Chinese firms about buying liquid cooling equipment for data centres, according to people with knowledge of a visit to China by one of the U.S. firm's procurement teams. Liquid cooling systems - which circulate water or other liquid over or around equipment - have become critical in AI data centers as the high-density computing generates more heat than a traditional air cooling system can handle. The visit by the team from Google's Taiwan operations this month reflects tight supply of parts for such systems, the sources said. During the visit, Google's team has met with Envicool, said two of three sources, who were not authorised to speak to media and declined to be identified. The team also plans to meet with at least one other company, according to a separate source. Neither Google nor Shenzhen-based Envicool replied to Reuters requests for comment. The talks highlight how the global race to build AI data centre infrastructure has tightened supply of not just advanced chips but also lower-value equipment, as well as the growing role of Chinese suppliers in global data centre growth despite heightened U.S.-Sino tensions. HUGE MARKET GROWTH EXPECTED The global market for AI server liquid cooling systems is projected to surge to more than $17 billion in 2026 from $8.9 billion last year, driven by demand from Nvidia and cloud providers deploying custom AI chips, according to a JPMorgan report. Envicool, founded in 2005 with a market value of 98 billion yuan ($14 billion), saw revenue surge 40% during the first nine months of the year. At a recent industry event, it showcased a coolant distribution unit (CDU), a critical component of liquid cooling systems that distributes coolant to server racks, built to Google's specifications. Envicool expects liquid cooling revenue to grow on a quarterly basis this year with a pipeline that includes potential orders from Google for its fifth-generation CDUs and other components, according to a Goldman Sachs report following an analyst call with the company this month. The company has also said it plans to expand capacity at a new factory in Guangdong province, while continuing to build out facilities in Thailand and the United States. The liquid cooling market is highly fragmented, with many suppliers providing different parts of such systems. Chinese suppliers have gradually gained traction, benefiting from strong domestic demand, as the country's many data centre projects have helped them boost production volume and lower costs. Leading suppliers include Lingyi iTech and Feilong Auto Components as well as server manufacturers such as Lenovo. In Taiwan, companies such as Foxconn, Auras and Delta Asia are major suppliers of such parts for Google in Asia. Other Chinese parts suppliers benefiting from AI data centre growth include makers of optical transceivers like Innolight and Eoptolink. Chinese manufacturers also dominate the printed circuit board market, with companies like Victory Giant Technology counting Nvidia and Google as clients. (Reporting by Liam Mo and Miyoung Kim; Editing by Edwina Gibbs)