According to a recent Dell’Oro Group report, the liquid cooling market revenue will approach $2 billion by 2027 at a CAGR of 60% between 2020 and 2027. And it’s no surprise.
As the demand for power-intensive applications like artificial intelligence (AI) and high-performance computing (HPC) continues to accelerate, data centers will need to contain more powerful and densely arrayed hardware, which will use vast amounts of energy and produce more heat.
In this reality, liquid cooling represents an advanced solution for operators to keep their infrastructure cool and more efficient. But how does the technology work, and why is it becoming so popular?
The Rise of Liquid Cooling
Data centers have always needed innovative methods to keep cool. Traditionally, operators have used air cooling to remove the heat naturally created by electricity usage. This involves removing heat through the flow of air, lowering the surface temperature of equipment using simple equipment.
However, as the power density (AKA the proportion between the amount of power per unit of space) of data centers continues to increase, air cooling is reaching its limit. Its heat dissipation effect is greatly affected by factors such as environmental temperature and air circulation, and ultimately, it is not suitable for high-power equipment and is ineffective for racks with densities above 3-40 kW.
As data centers produce more heat, efficient ways of keeping equipment temperatures stable in operational ranges are required. Compared to air cooling, liquid cooling systems are designed to handle power densities greater than 40 kW per rack, far exceeding the capabilities of traditional air systems. Operators can use a couple of different methods.
Direct-to-chip cooling, an increasingly popular method with the surge of AI-integrated solutions, uses cold plates mounted directly on major components, like CPUs and GPUs, to transfer heat to coolants, keeping component temperatures within safe limits and allowing uninterrupted operations. Immersion cooling eliminates air as a cooling medium, immersing IT components in dielectric fluids that offer high heat transfer efficiency, allowing for even higher power densities.
With the ability to far exceed the capabilities of traditional air-cooling systems, liquid cooling seems like the obvious choice for operators aiming to use very dense IT solutions.
Let’s take a look at some of the main benefits it offers:
Supports AI and High-Performance Computing
According to research from IDC, European spending on AI is projected to reach $133 billion by 2028, growing at a CAGR of 30.3% since 2024. This massive adoption will need the hardware to support it.
As data center operators continue to build the required infrastructure for this high computing power, significant thermal loads will be generated. Liquid can handle these thermal loads efficiently, supporting the high rack densities needed to process large volumes of data and execute complex algorithms quickly.
For AI and machine learning applications, maintaining a stable temperature to avoid throttling is more important than ever, as it can compromise performance and reliability. Direct-to-chip or immersion cooling can keep IT components at optimal temperatures, ensuring consistent performance and reducing the risk of overheating.
Additionally, the ability to directly cool critical components without relying on air enables greater cooling efficiency and faster response to the variable loads typical of AI applications. For operators looking to support the demands of their future customers, liquid cooling offers an effective way to ensure reliable and stable services.
Supports Sustainability Targets
One of the most prominent considerations for data center operators is energy efficiency. Accounting for nearly 2.7% of European electricity usage, and expected to reach 3.21% by 2030, the environmental footprint of this infrastructure is of concern, and finding ways to reduce the energy required to support the IT demand in data centers has become a priority for owners. Traditional cooling methods often account for an important percentage of overall data center energy use. Liquid cooling uses less energy to achieve the same, or even better, cooling. This is because liquids possess far superior heat transfer abilities compared to air, allowing for more effective heat dissipation, and because the liquid cooling solutions provide direct intervention on the chips of the servers.
Liquid cooling can also work at relatively high water temperatures, meaning data centers will no longer rely exclusively on energy-hungry chillers whose cooling implies the action of compressors in the chain. For the greater part of the year, indirect free cooling will be a viable solution.
Water Usage and Future Innovations
With the increase in demand for data centers and capacity worldwide, water consumption from data centers using evaporative techniques has risen significantly in recent years.
Responsible water management should be a crucial consideration for all operators, and those using water-efficient technologies like liquid cooling are no exception. The Carbon Neutral Data Center Pact (CNDCP) emphasizes water conservation as a key component of sustainable data center operations. In fact, in 2022, the CNDCP proposed a limit to the consumption of 0.4 litres of water per kWh of computer power to keep operators on track.
In addition, the Water Usage Effectiveness (WUE) is an obligatory metric to be reported by the operators according to the provisions of the European Union’s Energy Efficiency Directive, highlighting once again the importance of the topic and how the water consumption rate from data centers is under the scope of regulators.
With most liquid cooling systems, water is used, not consumed, meaning it is kept in a closed loop with a slight increase in temperature. There are some really exciting innovations in the type of water operators can use to cool their data centers and ways of using excess heated water after cooling. Leveraging alternative water sources like greywater and rainwater to minimize reliance on more scarce potable water, which is safe for public consumption, will certainly be the next step for innovation.
Additionally, interesting approaches can be taken by working with civil infrastructure and the local authority to use the huge amount of heated water produced in huge data centers using liquid cooling systems. By adopting these initiatives and embracing these solutions, the data center industry can significantly reduce its environmental impact and contribute to a more sustainable future.
The Future of Liquid Cooling
As technology continues to evolve, so too will cooling techniques. Advanced systems, such as immersion cooling and direct-to-chip cooling, offer high energy efficiency and performance, enabling operators to reduce their carbon footprint. Additionally, energy recovery and reuse technologies can harness the waste heat generated by these systems, unlocking additional sustainability benefits.
These innovative solutions enable the industry to meet the growing demands for AI and HPC while minimizing environmental impact. As the industry continues to explore new frontiers, liquid cooling stands out as a key technology that will shape the future of data centers while always focusing on sustainability.
