Liquid-cooled servers are experiencing explosive growth, as tech giants accelerate their adoption of liquid cooling technology to tackle the mounting heat challenges posed by the surge in AI computing power. Meanwhile, industry penetration rates are rapidly increasing, and the market size is expanding exponentially. Below, we’ll delve into this trend through four key lenses: market drivers, technological advancements, major players’ strategic moves, and supportive government policies.

1. Market-driven: AI computing power surges, pushing cooling demands beyond the limits of air cooling.

1. Computing power density soars:

AI large-model training has driven data center cabinet power density to surge from 10kW to over 120kW. Meanwhile, traditional air-cooling technology can effectively manage only 40–50kW; beyond that threshold, it requires massive fans and complex airflow systems, leading to skyrocketing energy consumption, bulky cabinet designs, and increased failure rates. For instance, NVIDIA’s H100 chip already boasts a thermal design power of 700W, with upcoming models expected to exceed 1,500W—far surpassing the cooling capacity of air-cooling solutions.

2. Energy Consumption Pressure Drives Transformation:

The U.S. data center electricity demand is projected to surge from 25 gigawatts to 80 gigawatts within five years, driving up energy costs as a significant portion of overall operational expenses. Liquid cooling technology, which directly absorbs heat from core hardware components while minimizing the need for fans and air conditioning systems, can reduce a data center’s PUE (Power Usage Effectiveness)—a key metric measuring energy efficiency—from 1.5 (typical for air-cooled systems) down to below 1.1. This breakthrough not only enhances energy efficiency but also dramatically lowers the total cost of ownership (TCO).

II. Technological Upgrade: Liquid Cooling Evolves from "Optional" to "Essential"

1. Cooling efficiency outperforms air cooling by a wide margin:

Water has a thermal conductivity more than 23 times that of air, and its heat absorption capacity per unit volume is approximately 3,243 times greater—enabling higher deployment densities. For instance, Lenovo’s Neptune liquid cooling technology achieves fully water-cooled, fanless server designs with cooling efficiency as high as 98%, allowing the Power Usage Effectiveness (PUE) to drop below 1.1.

2. Integrated and Innovative Technology Roadmap:

- Cold plate liquid cooling: This method dissipates heat by directly contacting the cold plate with heat-generating components, making it suitable for high-power devices like CPUs and GPUs. It’s cost-effective and has already been scaled up for widespread application.

- Immersion liquid cooling: Servers are directly submerged in a cooling liquid, delivering higher thermal efficiency and enabling PUE values as low as close to 1.0—ideal for ultra-large-scale data centers. Sugon’s third-generation C8000 immersion liquid-cooling solution has achieved a single-cabinet power density exceeding 750 kW, with a PUE as low as ≤1.04.

- Two-phase cooling technology: This method enhances heat dissipation by utilizing the heat absorption that occurs during the phase change of the coolant, though it comes with higher maintenance complexity and is currently in the pilot-testing phase.

3. Accelerating the standardization process:

Intel has spearheaded the establishment of the Universal Quick-Connect Interchange Alliance, with the first batch of certified partners—including companies like Inovik—aiming to address compatibility issues in liquid cooling systems and drive the industry toward scalable growth.

3. Tech Giants Step In: Global Players Rush to Secure Prime Positions

1. Chip Manufacturer:

- NVIDIA has announced that all its future GPU products will transition to liquid cooling technology. The company’s GB200 NVL72 rack-mounted server is set for mass shipments starting in 2025, driving a surge in demand for liquid cooling solutions.

- Manufacturers such as AMD and Intel are accelerating the development of complementary liquid cooling solutions to enhance chip energy efficiency.

2. Server Vendor:

- Lenovo upgrades the Neptune liquid cooling system to support multiple GPU types, enabling a fully water-cooled, fanless design.

- ZTE launches its G5 series servers, featuring CPU liquid cooling along with memory module and VR liquid cooling solutions, driving PUE down to as low as 1.1.

- Huawei H3C unveils its full-stack liquid cooling solution, covering the G6 series servers, core routers, and access switches.

3. Cloud Service Provider:

- North America's four major cloud providers—Google, Amazon, Microsoft, and others—are deploying modular buildings equipped with liquid-cooling infrastructure in locations such as the Netherlands, Germany, and Ireland. Meanwhile, Microsoft plans to make liquid-cooling systems the standard architecture across its operations starting in 2025.

- Domestic cloud providers such as Alibaba, Tencent, and ByteDance are accelerating the construction of liquid-cooled data centers, with Inovance offering its comprehensive Coolinside liquid-cooling solution to support them.