Core Viewpoint - The demand for cooling solutions is increasing due to the rising power density of AI chips and servers, with liquid cooling expected to replace air cooling as the mainstream solution by 2026, reaching a market size of $8.6 billion globally [2][3]. Group 1: Liquid Cooling Market Dynamics - The global AI liquid cooling market is projected to grow rapidly, with a forecasted market size of $8.6 billion by 2026, driven by the increasing power density of AI chips and servers [2][3]. - The power density of AI servers is expected to exceed 1MW per cabinet by 2029, highlighting the need for efficient cooling solutions [2][3]. - The liquid cooling market in China is anticipated to grow by 67% year-on-year in 2024, reaching $2.37 billion, with a CAGR of 46.8% from 2024 to 2029 [3][42]. Group 2: Advantages of Liquid Cooling - Liquid cooling systems offer higher cooling efficiency and reduced system power consumption compared to traditional air cooling, making them a preferred choice as power density increases [2][22]. - The cooling efficiency of liquid cooling is significantly higher than that of air cooling, with water's thermal conductivity being over 23 times greater than that of air [22]. - Liquid cooling allows for higher density deployment of computing units, reducing the physical space required and improving overall system performance [22][25]. Group 3: Industry Trends and Developments - Major cloud service providers are significantly increasing their capital expenditures, with the top four North American cloud companies expected to reach $366.1 billion in total capital expenditures by 2025, reflecting strong demand for AI infrastructure [7]. - Companies like Alibaba and ByteDance are ramping up investments in AI and cloud computing infrastructure, with Alibaba planning to invest over $50 billion in these areas over the next three years [8]. - The liquid cooling technology is being rapidly adopted by leading server manufacturers, with companies like Supermicro and HPE launching liquid-cooled server solutions [41][43]. Group 4: Liquid Cooling Technology Types - Liquid cooling can be categorized into indirect contact (cold plate cooling) and direct contact (immersion and spray cooling), with cold plate cooling being the most mature and widely adopted technology [3][30]. - Cold plate cooling systems are expected to lead the market due to their minimal impact on existing infrastructure and superior cooling performance compared to air cooling [3][30]. - Immersion cooling, while offering the best cooling performance, presents higher technical challenges and is still in the exploratory phase [3][30]. Group 5: Energy Efficiency and Cost Savings - Liquid cooling systems can significantly reduce energy costs in data centers, with potential savings in operational costs due to lower energy consumption compared to air cooling systems [25][29]. - The total cost of ownership (TCO) for liquid cooling solutions is expected to be lower than that of air cooling, as they can reduce the need for additional cooling equipment [25][29]. - As data center energy efficiency becomes a regulatory focus, liquid cooling solutions are positioned to meet stringent PUE requirements, enhancing overall energy utilization [17][20].

Core Viewpoint - HUT8's Q2 2025 report highlights the advancement of liquid cooling systems, bridging the gap between traditional air-cooled ASIC infrastructure and liquid-cooled GPU infrastructure, with increasing cabinet density and market potential for liquid cooling solutions [1] Group 1: Market Trends - The trend towards liquid cooling has been initiated by the increasing shipment of NVIDIA's GB200 cabinets, which feature cold plate liquid cooling design, marking the beginning of a new era in liquid cooling [2] - The growth of the liquid cooling market is driven by two main factors: the rising power consumption of GPU chip designs necessitating upgraded cooling solutions, and the increasing integration demands of data centers [2][3] Group 2: Industry Dynamics - The integration of data centers is pushing the need for advanced cooling solutions, as traditional air cooling cannot meet the economic and integration requirements of high-performance computing centers [3] - The future of the liquid cooling industry is clear, with a shift from traditional air cooling to liquid cooling solutions, including cold plate, spray, and immersion cooling systems [3] Group 3: Investment Opportunities - Companies to watch in the liquid cooling space include Invec (002837.SZ), Kehua Data (002335.SZ), Wangsu Science & Technology (300017.SZ), Yimikang (300249.SZ), Shenling Environment (301018.SZ), and Gaolan Co. (300499.SZ) [3]