2026: The Year Liquid Cooling Takes Off — AI Computing Power Fuels a Trillion-Yuan Market as Domestic Substitution Accelerates

As demand for AI computing power grows exponentially, traditional air cooling is approaching its physical limits in high-power-density environments. Liquid cooling has become a core pillar of AI infrastructure. 2026 is widely seen as the key year when the industry moves from pilot projects to large-scale production.

1. AI Server Liquid Cooling Industry Development Status

Liquid cooling has moved from an optional approach to a must-have standard. Since 2026 began, the global race for AI computing power has intensified, with rapid model iteration and large-scale cluster expansion pushing chip power consumption sharply higher. Take NVIDIA as an example: thermal design power on a single chip has risen from 700W on the H100 to above 1,000W on the B200/B300. Google’s TPU v7 reaches as high as 980W per chip, and both require 100% liquid cooling. Traditional air cooling can no longer meet the thermal demands of high-density computing scenarios. Liquid cooling is being upgraded from a niche innovation to the mainstream standard in AI data centers.

The penetration of liquid cooling in AI chips and data centers is rising quickly. Global liquid cooling penetration in AI data centers is expected to climb from 14% in 2024 to 40%-47% in 2026. For AI training servers worldwide, liquid cooling penetration will surge between 2025 and 2027, jumping from 15% in 2024 to 80% in 2027. In China, penetration rose from less than 3% in 2021 to 20% in 2025. Driven by the AI computing boom and the rollout of mandatory liquid-cooling solutions such as GB200, it is expected to reach 37% in 2026, exceed 50% in 2027, and rise further to 82% by 2030.

Data center cooling architecture is moving from hybrid cooling toward a full liquid-cooling era. NVIDIA’s GB200/GB300, which entered mass production in 2025, use a hybrid setup of 85% liquid cooling and 15% air cooling. Vera Rubin NVL72 compute trays, set to ship from 2026, will adopt 100% full liquid cooling, and later products such as Rubin Ultra and Feynman, with even higher power draw, will further lock in this technical path. That marks the formal arrival of the full liquid-cooling era in data centers. At GTC 2026, Jensen Huang said a full liquid-cooling architecture can cut VR server deployment time from two days to two hours and significantly improve token generation efficiency.

2. AI Server Liquid Cooling Industry Chain Analysis

From an industry-chain perspective, the AI server liquid cooling sector has already formed a complete value chain spanning core components, system integration, and downstream applications. Upstream depends on coolant fluids such as deionized water, fluorocarbon-based fluids, and oils, as well as precision parts including solenoid valves, connectors, and manifolds. Midstream relies on CDU units to exchange cooling capacity between the primary and secondary loops, while coupling deeply with AI computing chips, including GPUs and ASICs. Downstream applications have expanded from data centers and internet cloud providers to telecom base stations, energy use cases such as energy storage stations and charging piles, and high-computing-power trading systems in finance. The core feature of this ecosystem is that shared technical roots allow companies from automotive thermal management and industrial temperature control to enter liquid cooling from adjacent markets. At the same time, downstream customers, especially top internet companies, are pushing suppliers toward higher precision, lower leakage, and longer service life. As AI computing shifts from training to inference and edge computing nodes begin to unlock potential demand for liquid cooling, the industry’s boundaries will expand further into more high-power-density scenarios.

3. Market Size Analysis and Forecast

Global server market size: the global server market reached $444.1 billion in 2025, up 80.4% year over year, mainly driven by high prices for AI servers and surging shipments. The global server market is expected to exceed $550 billion in 2026, rising more than 50% year over year. China’s market will grow more than 35% year over year, with its share of the global market continuing to rise.

Liquid cooling market size: the global server liquid cooling market is expected to grow from $12.57 billion in 2026 to $53.51 billion in 2030, representing a compound annual growth rate of 43.6% between 2026 and 2030. By 2030, the cold plate market could reach $23.02 billion, manifolds $2.29 billion, quick connectors $5.04 billion, and CDUs $20.64 billion, with the market size for a single component exceeding 10 billion yuan.

4. Competitive Landscape

The global server liquid cooling industry is still in an early stage and has not yet formed an absolute monopoly. Major global vendors such as Vertiv, Stulz, Midas, Rittal, and Envicool still lead core component markets thanks to early-mover advantages and technical depth. For example, the top five players in the CDU market - Vertiv, Envicool, nVent, Schneider Electric, and Delta - hold a 65% share, while the top five in the cold plate market - Auras, Twintech, Cooler Master, CoolIT, and Baode - account for 96%. Chinese companies have narrowed the gap quickly in recent years on technology, price-performance, with costs more than 30% lower, and response speed, accelerating domestic substitution. Envicool has become the only liquid cooling supplier in mainland China to pass NVIDIA’s NPN Tier1 certification. Feilong has already shipped CDU circulation pumps in volume, while Chuanhuan Technology and Sulian have entered the supply chains of leading integrators. Future competition will shift from single-component supply to full-chain system integration. Companies that can deliver complete solutions spanning cold plates, manifolds, quick connectors, and CDUs will have the edge.

5. Key Domestic Companies

Envicool is a leading domestic provider of precision thermal management and energy-saving equipment. It was among the first to launch its highly reliable Coolinside full-chain liquid-cooling solution, covering cold plates, quick connectors, manifolds, CDUs, cabinets, long-life liquid-cooling working fluids, piping, and cooling sources in an end-to-end package. The company is the only liquid cooling supplier in mainland China to pass NVIDIA’s NPN Tier1 certification. In 2024, it ranked first among CDU vendors in China’s liquid-cooled data center market. Its customers include China Mobile, China Telecom, China Unicom, Huawei, ByteDance, Tencent, Alibaba, and Baidu.

Gaolan shares focuses on pure-water cooling equipment for power electronics devices and offers a range of IT and communications liquid-cooling solutions centered on cold-plate and immersion approaches. It has end-to-end capabilities spanning thermal architecture design, equipment integration, system commissioning, and operations and maintenance. Its products include server liquid-cooling plates, fluid connectors, manifolds, multiple CDU models, tanks, piping systems, dry coolers, and cooling towers. According to a CCID Consulting report, the company ranked first among liquid-cooled data center vendors in China’s AI computing industry in 2024. It is the exclusive supplier of immersion modules for ByteDance and won a 3 billion yuan China Mobile project.

Shenling Environment’s core business centers on dedicated air conditioners and air-environment control equipment. Its liquid cooling lineup includes cooling-source modules, integrated cooling sources, prefabricated piping networks, dry coolers, CDUs, manifolds, quick connectors, liquid-cooling doors, and cold plates. The company is Huawei’s only liquid cooling partner for data centers and can provide a full-stack liquid-cooling solution, with PUE as low as 1.15.

Feilong shares has more than 60 years of history in auto parts manufacturing, and its automotive water pumps and turbocharger housings have been recognized by the Ministry of Industry and Information Technology as single-item champion products in manufacturing. In server liquid cooling, the company’s self-developed electronic pump series and thermostat valve series have already been validated by the market for performance and reliability. Its HP22K liquid-cooling circulation pump is a core product in the in-row CDU segment and has already shipped in volume. Customers include Shenling Environment, Envicool, Gaolan shares, Baode, Sugon Digital, and Vertiv.

Chuanhuan Technology focuses on the R&D and manufacturing of plastic fluid piping and components, with forward-looking deployments in energy storage and data center cooling pipes. The company can manufacture rubber hoses, nylon tubes, and connectors in-house. Technical indicators for liquid-cooling piping systems used in data services have reached V0 standards, and the products have passed UL certification in the United States. Its piping products have entered the supplier systems of Cooler Master, AVC, Envicool, Avary Holding, Feltec, and Baode South China.

Sulian shares focuses on plastic fluid piping and components and is actively expanding into data center liquid-cooling thermal management. Related business is mainly carried out by its subsidiary Sulian Zhikong, whose products include piping, connectors and valves such as quick connectors and UQD, distribution structures such as manifolds and fluid splitters, and core thermal management components including liquid-cooling plates. The company has completed major performance testing and validation for its UQD products and is now developing supporting liquid-cooling modules and system-level solutions. It has established business ties with major domestic server makers and leading international thermal management system integrators.

Yinlun shares is a leading domestic thermal management company and has ranked first in China for heat exchanger production and sales for many consecutive years. In the data center segment, the company has built a liquid-cooling portfolio covering both inside and outside server cabinets, including megawatt-class immersion integrated liquid-cooling equipment, precision air conditioning plus cooling towers, server liquid cooling and air cooling CDUs plus chip cold plate modules and manifolds, and liquid-cooling modules for diesel generators. In customer expansion, it has initially formed a “3+3+N” layout.

Sanhua Intelligent Controls centers on heat pump technology and thermal management system products, and remains a global leader in components such as valves, pumps, and heat exchangers. Its liquid-cooling products mainly focus on the outdoor-unit side and refrigerant side, and extending into server-side products will become a new growth engine. The company has already won recognition from benchmark customers in the sector.

Sugon began liquid-cooling research in 2011 and has gone through three stages of development: cold-plate cooling, immersion liquid cooling, and immersion phase-change liquid cooling. Its immersion liquid-cooling market share is as high as 58.8%. Compared with traditional air-cooled data centers, its immersion liquid-cooling infrastructure solution saves more than 30% in energy. The first-generation C8000 immersion liquid-cooling solution reaches a per-cabinet power density of more than 200kW and reduces data hall floor space by more than 80%. Its products are widely used by customers including China Mobile, China Telecom, China Unicom, Huawei, ByteDance, Tencent, Alibaba, Baidu, and Meituan.