Data center liquid cooling is becoming the new standard for AI. Modern AI chips produce so much heat that fans and air conditioning can no longer keep up. As a result, the industry is switching to liquid in 2026. This post explains how it works, why it is spreading, and what it means for India.
What Is Data Center Liquid Cooling?
Traditional data centers blow cold air across their servers. However, liquid cooling works differently. Instead of air, a coolant flows through small metal plates that sit directly on the processors. The coolant carries the heat away at the source, and engineers call this method direct-to-chip cooling.
Liquid also moves heat far better than air. For example, Schneider Electric notes that GPUs can generate up to 50 times more heat than CPUs. Behind the racks, a closed pipe network moves the fluid between the servers and the building’s main cooling system. Engineers often call this network a Secondary Fluid Network (SFN).
Why Is Data Center Liquid Cooling Spreading Now?
Nvidia is the biggest driver. Its Vera Rubin platform is fully liquid-cooled and fanless, so operators must install liquid cooling before they can host it. In fact, TrendForce data puts liquid cooling at about 33% of AI chips in 2025. That share reaches 53% in 2026 and roughly 60% in 2027.
Liquid cooling can also lower running costs. Vera Rubin racks use water at 45°C. That is warm enough for outdoor dry coolers to remove the heat, so power-hungry chillers are often not needed. Meanwhile, Dell’Oro Group expects the global market to reach about $7 billion by 2029. Other research firms forecast growth of 15% to 29% a year.
What Is Making News in Liquid Cooling?
Companies are racing to own the whole cooling chain, not just the hardware. Here are the latest moves.
- Consolidation. Trane Technologies completed its LiquidStack acquisition in March. Ecolab also closed its purchase of CoolIT Systems.
- Fluid management. Vertiv partnered with Dow and Solenis on coolant and system monitoring. It also bought KES to add commissioning services.
- New fluids. Chemours launched Faizeon two-phase cooling fluids for AI and high-density data centers.
- Enterprise trials. Equinix opened liquid-cooling centers inside live data centers, so customers can test liquid-cooled servers.
The lesson is simple: running liquid cooling well matters as much as installing it. Clean coolant, careful commissioning and constant monitoring all protect uptime.
What Does This Mean for India?
On October 16, Vertiv said it delivered India’s first direct-to-chip liquid cooling deployment at CapitaLand India Trust’s Mumbai data center. The system supports 30 MW of AI workloads through a Secondary Fluid Network. However, the claim comes from Vertiv and has not been independently verified.
Water is the main reason this matters in India. Schneider Electric cites an S&P projection. It says 60-80% of India’s data centers will face high or extremely high water stress within the decade. Closed-loop liquid cooling uses far less water than evaporative cooling, so it suits these conditions well. Local supply is growing too, thanks to Schneider’s Bengaluru factory and KuhlTherm’s Made-in-India heat exchangers.
What Data Center Liquid Cooling Means for Operators
Liquid cooling is now a design decision, not a future upgrade. Therefore, operators should ask three questions early.
- Which racks need liquid? Next-generation AI platforms need it from day one. However, storage and networking can stay on air in a hybrid design. For example, Samsung SDS plans this approach at its new Gumi data center.
- Who will commission and maintain it? Schneider advises operators to weigh commissioning capability alongside hardware availability when they choose suppliers in India.
- How will you manage the coolant? Fluid quality, monitoring and compatibility all affect uptime for years.
At RexEdge, we design, manufacture and test cooling systems for AI and hyperscale data centers. These include Secondary Fluid Network (SFN) and Primary Fluid Network (PFN) products. We also make data center transformers and stainless-steel pipes and tubes. Contact the RexEdge team to see how these trends apply to your data center liquid cooling project.