Representatives from Google’s operations in Taiwan have traveled to China this month to discuss purchasing advanced cooling equipment for artificial intelligence data centers, according to sources familiar with the meetings.
The tech giant is reportedly negotiating with Envicool, a Shenzhen-based company, along with other Chinese manufacturers to secure liquid cooling systems that circulate water or other fluids around computing equipment. These specialized cooling systems have become essential for AI data centers because the intense computational power generates far more heat than traditional air conditioning can manage.
Sources who requested anonymity because they weren’t authorized to discuss the meetings said Google’s procurement team has already met with Envicool and plans additional meetings with at least one other company. The discussions underscore the tight supply situation for these critical components.
Both Google and Envicool declined to respond to requests for comment about the negotiations.
The talks illustrate how the worldwide push to construct AI infrastructure has created shortages not only for advanced computer chips but also for supporting equipment. They also demonstrate Chinese suppliers’ expanding influence in global data center development, even amid strained U.S.-China relations.
Market analysts predict explosive growth in this sector. JPMorgan forecasts the global AI server liquid cooling market will more than double from $8.9 billion last year to over $17 billion in 2026, fueled by demand from Nvidia and cloud computing companies deploying specialized AI processors.
Envicool, established in 2005 and currently valued at 98 billion yuan ($14 billion), reported a 40% revenue increase during the first three quarters of this year. At a recent industry conference, the company displayed a coolant distribution unit designed specifically to Google’s requirements. These units serve as crucial components that channel coolant to server racks.
Goldman Sachs analysts noted in a recent report that Envicool anticipates quarterly growth in liquid cooling revenue this year, with a project pipeline that may include orders from Google for fifth-generation coolant distribution units and additional components.
The company has announced plans to expand production capacity at a new facility in Guangdong province while continuing to develop operations in Thailand and the United States.
The liquid cooling industry remains highly segmented, with numerous suppliers providing various system components. Chinese manufacturers have steadily increased their market presence, capitalizing on robust domestic demand. The country’s extensive data center construction projects have enabled these companies to scale production and reduce costs.
Other prominent Chinese suppliers in this space include Lingyi iTech and Feilong Auto Components, as well as server manufacturers like Lenovo. In Taiwan, major suppliers serving Google’s Asian operations include Foxconn, Auras, and Delta Asia.
Additional Chinese component manufacturers benefiting from AI data center expansion include optical transceiver producers Innolight and Eoptolink. Chinese companies also control much of the printed circuit board market, with firms such as Victory Giant Technology serving clients including Nvidia and Google.
