Key Takeaways
- Alphabet’s procurement representatives traveled to China this month for meetings with liquid cooling equipment manufacturers, including Envicool
- Global supply constraints for liquid cooling components have intensified as artificial intelligence data centers proliferate
- Industry forecasts show the AI server liquid cooling sector reaching $17 billion by 2026, nearly doubling from $8.9 billion in 2025
- Envicool recently demonstrated a customized coolant distribution unit designed according to Google’s specifications at an industry conference
- According to Goldman Sachs analysts, Envicool anticipates sequential quarterly revenue increases in liquid cooling, with prospective Google contracts under discussion
Alphabet is turning eastward to address critical cooling infrastructure challenges. Representatives from the tech giant’s Taiwan-based procurement division made the journey to China this month for discussions with liquid cooling system manufacturers catering to data center operations.
Industry sources with knowledge of the meetings revealed that Google’s team engaged with Envicool, a Shenzhen-headquartered cooling solutions provider. An additional source indicated that the procurement group intends to connect with other manufacturers in the sector. Both Google and Envicool declined to provide statements when approached.
Liquid cooling technology operates by channeling water or specialized fluids directly onto or around computing hardware. Traditional air-based cooling methods have proven inadequate for modern AI data centers, where high-density computing generates exceptional heat levels.
The procurement mission underscores growing strain throughout data center supply networks—extending beyond semiconductor shortages to encompass seemingly mundane components like cooling infrastructure.
Explosive Market Expansion
The worldwide AI server liquid cooling industry is on track for remarkable expansion, with JPMorgan projecting growth from $8.9 billion in 2025 to surpass $17 billion in 2026. This trajectory stems from Nvidia and major cloud service providers deploying proprietary AI processing units.
Envicool, established in 2005 with an approximate valuation of $14 billion, reported 40% revenue growth during the initial three quarters of last year. During a recent trade exhibition, the manufacturer showcased a coolant distribution unit (CDU)—the mechanism responsible for delivering coolant throughout server rack systems—engineered precisely to Google’s technical requirements.
Goldman Sachs published research following a recent analyst briefing with Envicool, noting the company’s expectation for continued quarter-over-quarter liquid cooling revenue expansion throughout the current year. Fifth-generation CDU orders from Google remain under consideration.
Expansion plans are well underway at Envicool. The company is developing a production facility in Guangdong province while simultaneously advancing construction of operations in Thailand and the United States.
China’s Rising Presence in Cooling Technology
Chinese manufacturers have established increasing market share in liquid cooling systems, propelled by robust domestic demand. Extensive data center construction projects within China have enabled these companies to achieve economies of scale and competitive pricing.
Prominent industry participants include Lingyi iTech and Feilong Auto Components, along with server manufacturers such as Lenovo. The cooling solutions market remains highly fragmented, with numerous vendors specializing in distinct components of complete cooling architectures.
Taiwanese companies continue serving as primary suppliers for Google throughout Asia. Foxconn, Auras, and Delta Asia currently deliver cooling components to the technology leader. Chinese enterprises appear positioned to capture incremental orders as supply constraints persist.
Additional Chinese hardware producers capitalizing on AI data center expansion include optical transceiver specialists Innolight and Eoptolink. Printed circuit board fabricators such as Victory Giant Technology count both Nvidia and Google among their customer base.
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