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Google Seeks to Buy Liquid Cooling Technology Amid AI Data Centre Boom

By  |  March 17, 2026
Google Seeks to Buy Liquid Cooling Technology Amid AI Data Centre Boom

Alphabet’s Google is in discussions with Chinese companies, including Envicool, about acquiring liquid cooling equipment for its data centers, according to Reuters, citing sources familiar with the matter. The talks follow a recent visit to China by a procurement team from Google’s Taiwan operations, reflecting increasing pressure on supply chains tied to artificial intelligence infrastructure.

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    Liquid cooling systems, which use water or other fluids to regulate temperatures, have become essential in modern AI-driven data centers. These facilities generate significantly more heat than traditional setups, making conventional air cooling insufficient. According to Reuters, the surge in demand for such systems has led to shortages of key components, prompting companies like Google to explore new supplier relationships.

    During the visit, Google representatives met with Envicool, two sources said, while another source indicated that additional meetings with at least one other Chinese company were planned, per Reuters. The individuals declined to be identified as they were not authorized to speak publicly. Neither Google nor Envicool responded to Reuters’ requests for comment.

    The discussions underscore how the global race to expand AI infrastructure is straining supply chains beyond advanced semiconductors. According to Reuters, even lower-cost but essential components such as cooling systems are becoming harder to secure, highlighting the growing importance of Chinese manufacturers despite ongoing geopolitical tensions between the United States and China.

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    Market forecasts suggest strong growth ahead. A J.P. Morgan report projects that the global market for AI server liquid cooling systems will exceed $17 billion by 2026, up from $8.9 billion last year, driven by demand from companies such as Nvidia and cloud providers deploying custom AI chips, according to Reuters.

    Related: Google Revamps Android App Store Rules, Cuts Fees Amid Global Antitrust Pressure

    Envicool, founded in 2005 and currently valued at around 98 billion yuan ($14 billion), has benefited from this trend. The company reported a 40% increase in revenue during the first nine months of the year, according to Reuters. At a recent industry event, it showcased a coolant distribution unit designed to meet Google’s specifications, signaling potential alignment with the U.S. tech giant’s needs.

    Analysts note that Envicool expects continued growth in its liquid cooling business, with possible orders from Google for next-generation equipment, per Reuters, citing a Goldman Sachs report following a recent analyst call. The company is also expanding its manufacturing footprint, including a new facility in Guangdong province, alongside ongoing development in Thailand and the United States.

    The liquid cooling sector remains highly fragmented, with numerous suppliers specializing in different components. Chinese firms have gained momentum due to strong domestic demand and large-scale data center construction, which has enabled them to scale production and reduce costs, according to Reuters. Other key players include Lingyi iTech, Feilong Auto Components, and server manufacturer Lenovo.

    Meanwhile, Taiwan-based companies such as Foxconn, Auras, and Delta Electronics continue to play a major role in supplying components to Google across Asia. Additional Chinese firms are also benefiting from AI-driven demand, including optical transceiver makers Innolight and Eoptolink, as well as printed circuit board manufacturers like Victory Giant Technology, which counts Nvidia and Google among its clients, according to Reuters.

    Source: Reuters