Key Takeaways
- Google procurement representatives traveled to China in recent weeks to evaluate liquid cooling equipment manufacturers, including Envicool
- Global supply constraints for liquid cooling components have intensified amid rapid AI data center expansion
- Industry forecasts predict the AI server liquid cooling sector will surge to $17 billion by 2026, nearly doubling from $8.9 billion in 2025
- Envicool demonstrated a custom-designed coolant distribution unit matching Google’s specifications at a trade show
- Goldman Sachs reports Envicool anticipates consistent quarterly revenue growth in liquid cooling, with prospective Google contracts under consideration
In response to mounting cooling challenges, Google has turned its attention to Chinese manufacturers. The tech giant’s procurement division from its Taiwan-based operations recently traveled to China to evaluate liquid cooling system providers for its expanding data center infrastructure.
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
Industry insiders with knowledge of the trip confirmed meetings took place with Envicool, a Shenzhen-headquartered cooling specialist. An additional source indicated the delegation intends to engage with other suppliers as well. Both Google and Envicool declined to provide statements on the matter.
Liquid cooling technology works by cycling water or specialized fluids directly onto or adjacent to computing hardware. As AI data centers concentrate increasingly powerful processors in confined spaces, traditional air cooling methods have proven inadequate to manage the thermal output.
This sourcing mission underscores the intensifying supply constraints affecting the entire data center ecosystem — extending beyond advanced semiconductors to encompass essential supporting infrastructure like thermal management equipment.
Explosive Market Expansion
According to JPMorgan projections, the worldwide AI server liquid cooling industry will experience dramatic expansion, climbing from $8.9 billion in 2025 to exceed $17 billion in 2026. This growth trajectory stems from demand generated by Nvidia alongside cloud service providers deploying proprietary AI processing chips.
Envicool, established in 2005 with a current valuation approaching $14 billion, reported revenue growth of 40% during the initial three quarters of last year. During a recent trade exhibition, the manufacturer showcased a coolant distribution unit (CDU) — the critical component responsible for channeling coolant throughout server racks — engineered precisely to Google’s technical requirements.
According to a Goldman Sachs analysis published after discussions with Envicool representatives this month, the company projects continuous quarter-over-quarter revenue expansion in its liquid cooling division throughout the current year. The report noted that fifth-generation CDU orders from Google remain under active consideration.
Meanwhile, Envicool continues its geographic expansion. The company has announced plans for a manufacturing facility in Guangdong province, with additional production sites underway in Thailand and the United States.
China’s Rising Influence in Cooling Technology
Chinese manufacturers have steadily increased their market presence in liquid cooling solutions, supported by robust domestic consumption. Massive data center construction projects within China have enabled these suppliers to achieve production scale and competitive pricing advantages.
Prominent participants include Lingyi iTech and Feilong Auto Components, complemented by server manufacturers such as Lenovo. However, the sector remains highly fragmented, with numerous vendors specializing in distinct components of comprehensive cooling architectures.
Taiwanese companies continue to serve as primary suppliers for Google throughout the Asian region. Foxconn, Auras, and Delta Asia all maintain existing relationships providing cooling infrastructure. Chinese manufacturers appear positioned to capture incremental demand as availability 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.
Wall Street consensus currently designates GOOGL stock as a Strong Buy, reflecting 26 Buy recommendations and six Hold ratings issued during the past three months. The mean price target of $376.57 suggests approximately 23% potential appreciation from present trading levels.
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