Key Highlights
- Representatives from Google’s procurement division traveled to China in recent weeks to evaluate liquid cooling equipment manufacturers, with Envicool among the companies on the itinerary
- Global availability of liquid cooling components faces constraints as artificial intelligence infrastructure projects multiply worldwide
- Market analysts forecast the AI server liquid cooling sector will reach $17 billion by 2026, representing significant growth from the $8.9 billion valuation in 2025
- Envicool demonstrated a customized coolant distribution unit designed according to Google’s technical specifications during a recent technology showcase
- Goldman Sachs analysts report Envicool anticipates consistent quarterly revenue expansion in liquid cooling, with prospective Google contracts under consideration
Google has directed attention toward Chinese manufacturers to address critical infrastructure requirements. Representatives from the company’s Taiwan-based procurement operations traveled to China during the current month to evaluate suppliers of liquid cooling technology for data center applications.
Google is in talks with China’s Envicool and other suppliers to buy liquid cooling systems for data centers, according to Reuters. The report says a $GOOGL procurement team from Taiwan visited China this month. pic.twitter.com/biiUt1Cj2C
— Wall St Engine (@wallstengine) March 17, 2026
Multiple industry sources with knowledge of the meetings confirmed that Google’s delegation held discussions with Shenzhen-headquartered Envicool. An additional source indicated the team scheduled meetings with other suppliers in the region. Both Google and Envicool declined to provide official statements.
Liquid cooling technology operates by circulating water or specialized fluids in direct contact with computing hardware. AI-focused data centers generate substantial heat due to densely arranged processors operating at maximum capacity, making traditional air-based cooling methods insufficient.
Google’s outreach to Chinese manufacturers highlights the supply constraints affecting the entire data center equipment ecosystem, extending beyond semiconductor chips to encompass supporting infrastructure components.
Rapid Market Expansion Underway
Industry analysts at JPMorgan project the worldwide AI server liquid cooling market will experience dramatic expansion, climbing from $8.9 billion in 2025 to surpass $17 billion in 2026. This growth trajectory stems from deployment plans by Nvidia and major cloud computing providers implementing proprietary AI processors.
Envicool, established in 2005 with a current market capitalization approaching $14 billion, reported revenue growth of 40% during the initial three quarters of last year. The company recently exhibited a coolant distribution unit (CDU) at an industry conference—a critical component responsible for circulating coolant throughout server infrastructure—engineered specifically to meet Google’s technical requirements.
Goldman Sachs published research following discussions with Envicool representatives this month, indicating the company projects consecutive quarterly revenue growth in its liquid cooling division throughout the current year. Fifth-generation CDU orders from Google remain under active consideration.
Envicool continues infrastructure expansion with plans for a manufacturing facility in Guangdong province, alongside production sites under development in Thailand and the United States.
Chinese Manufacturers Capture Market Share
Manufacturers based in China have established stronger positions in the liquid cooling equipment sector, supported by robust domestic demand. Large infrastructure projects within China have enabled these companies to achieve production scale and competitive pricing advantages.
Major participants include Lingyi iTech and Feilong Auto Components, along with established server manufacturers such as Lenovo. The sector remains highly fragmented, with numerous companies specializing in specific components within complete cooling systems.
Taiwanese corporations maintain significant supply relationships with Google throughout Asia. Foxconn, Auras, and Delta Asia currently serve as cooling component providers. Chinese manufacturers appear positioned to capture incremental volume as supply chain pressures intensify.
Additional Chinese technology suppliers benefiting from AI data center infrastructure growth include optical transceiver manufacturers Innolight and Eoptolink. Printed circuit board producers such as Victory Giant Technology count both Nvidia and Google among their customer base.
Financial analysts on Wall Street maintain a Strong Buy consensus rating on GOOGL shares, supported by 26 Buy recommendations and six Hold ratings issued during the previous three months. The consensus price target of $376.57 suggests potential upside of approximately 23% from present trading levels.
