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Money starts to flow as liquid cooling gets hot in datacenters

Global investment company KKR picks up CoolIT Systems for $270M

Liquid cooling has become a hot topic as processors and other datacenter kit consume ever more power and generate more heat that needs to be dissipated. Yet perhaps the clearest sign that the tech is set to become a growth area is when investors start throwing their money around.

This month news emerged that CoolIT Systems, which has been making liquid cooling gear for a couple of decades, is to be acquired by global investment company KKR in a bid said to be worth $270 million.

According to CoolIT, the investment will let it scale up and serve global customers in the datacenter market, which covers the enterprise, high-performance computing (HPC), and cloud service provider segments.

Clearly KKR expects to get a return from its investment in CoolIT, not that you would guess from its statements regarding the pending acquisition. Managing director Kyle Matter warned: "Increasing data and computing needs are on a collision course with sustainability considerations."

He claimed the datacenter industry is on track to consume 8 percent of the world's energy by 2030 if nothing changes, and trends such as AI processing are driving this harder.

"We believe that liquid cooling has a critical role to play in helping to reduce the emissions footprint of our digital economy and we are thrilled to back CoolIT, a leader in this space," he added.

Recent figures suggest that liquid cooling is forecast to grow from just 5 percent of the datacenter thermal management market to as much as 26 percent by 2026 as more high-performance infrastructure is deployed. The soon to be acquired company, meanwhile, made the FT's list of fastest growing US companies this year, albeit at no 218.

"Liquid cooling is already an area a lot of companies are having to invest in because of problems managing the high-performance servers they are putting in," said Gartner VP analyst Alan Priestley, who formerly served as a technical marketing manager at Intel.

CPUs now consume 250W to 300W of power, and GPUs 300W to 500W, Priestley pointed out. With demanding workloads like AI training, some servers have up to eight GPUs, which means they could be drawing 7-10kW per node, he said.

"Datacenters are trying to increase rack densities, with more memory per node and higher performance networking. Ratcheting up performance like this needs more power," Priestley added.

IDC senior research director Andrew Buss agreed, saying the current shift to higher chip or package power densities means that liquid cooling becomes more efficient and likely to be the preferred option.

"We're beginning to see support for direct liquid cooling loops being built into a number of modern datacenter facilities and in colocation providers," he told us.

Companies like Atos/Bull have embraced direct contact liquid cooling loops for their power-dense HPC servers, Buss said, which means they are able to squeeze six AMD Epyc sockets with maximum memory, NVMe storage and 100Gbps networking into a 1U chassis cooled by a custom cooling manifold.

Moises Levy, who leads datacenter power and cooling research at Omdia, said that adoption of liquid cooling will continue to increase globally.

"Liquid cooling may have reached or will soon reach a tipping point based on specific applications with compute intensive workloads, but not yet for the broader datacenter market," he told us.

"Liquid cooling technologies (direct-to-chip and immersion) are likely to continue to be the main disruptors, with the highest CAGR (compound annual growth rate) expected in the next few years."

Direct liquid cooling is the technology supported by CoolIT, which circulates the coolant (often just water) through cold plates attached directly to the component such as a processor. This kind of system is easier to deploy into existing rack infrastructure.

With immersion cooling the entire server node submerged in a coolant, typically a non-conductive dielectric fluid, and this usually calls for specialized racks, some of which position the nodes vertically instead of stacked horizontally. This kind of system tends to be selected only for new-build server rooms.

European cloud operator OVHcloud has developed its own system that combines both approaches. This means keeping the water block attached to the CPU and GPU while using immersion cooling in dielectric fluid for the rest of the components.

However, OVHcloud told us recently that it only intends to use this system for infrastructure in its cloud that will be running demanding workloads such as AI, gaming or high-performance compute (HPC) applications – at least for now.

One datacenter colocation provider said it does intend to offer immersion-based cooling as an option to all customers. GlobalConnect announced in February that it was deploying a system developed in partnership with immersion cooling specialist GRC, and that it would eventually roll out the technology to all 16 of its datacenters situated across Denmark, Norway, Sweden, Germany and Finland, based on customer demand.

So can liquid cooling help meet sustainability goals? OVH told us that its combined system is much more efficient than using air cooling. It claims that in tests, it had a partial power usage effectiveness rating (PUE), which just measured the energy used for the cooling system, of 1.004.

But Buss warned this needs to be approached properly, which means taking into account what happens to the waste heat. "Liquid cooling done right can certainly help achieve better efficiencies and help the environment, reducing the need to run compressor-based cooling and instead use heat-exchanger technology to keep the cooling loop temperatures low," he told us.

"But it needs to be done right and merely dumping the heat into the environment such as a lake or river can be harmful, so the ultimate heat path needs to be carefully designed for maximum reuse wherever possible."

The EU recently said that it wants to see more cities using waste heat from datacenters to heat homes, for example, however there are problems here as the heat produced is often not at a high enough temperature and fixing that means using more energy. That has not stopped some datacenter operators such as QTS in the Groningen region of the Netherlands from giving it a go.

Last year, The Register reported how the US Department of Energy was investing in projects to reduce the amount of energy used for cooling in datacenters, although the amount on offer ($42 million) was relatively small. We also reported how datacenters in China were rapidly adopting liquid cooling in response to new government regulations.

Other liquid cooling vendors that picked up investment include UK-based Iceotope, which last year got £30 million ($35.7 million at the time) in a funding round led by a Singapore private equity provider with an eye on the Asian market.

Intel also partnered with Green Revolution Cooling on liquid immersion technology, but the chip giant shelved plans for its own $700 million research and development lab for cooling tech in Oregon as part of recent cost-cutting moves. ®

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