Diversification is the name of the game for LiquidStack as the company and other liquid cooling players aim to meet skyrocketing demand for their technology. Speaking with Silverlinings about its newly unveiled single-phase cooling system, CEO Joe Capes said artificial intelligence (AI) is turning what used to be a niche market into a mainstream commodity. He added demand from some customers for liquid cooling solutions outstrips supply….by a LOT.
“We actually met recently with one customer who asked us what our capacity was and they said that they’re planning on buying four times the amount of capacity than the entire industry can support right now,” Capes said.
The CEO declined to name any customers interested in its new single-phase system, but its historical clients include Microsoft, NTT Data, Toyota and Standard Power.
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It’s not exactly clear how much total liquid cooling capacity the industry can deliver. But Capes said LiquidStack is preparing to open a new manufacturing facility in Texas that will initially be able to produce single- and two-phase equipment capable of cooling 100 megawatts worth of racks (1 megawatt is 1,000 kilowatts and data center racks today consume anywhere from 7 kW to 100 kW and beyond). He added that figure could rise as LiquidStack has the ability to expand its manufacturing capacity based on market demand.
An expansion could soon be necessary. According to Omdia, revenue from liquid cooling solutions is set to reach about $3 billion by 2026, making up roughly 20% of the $15 billion data center cooling market.
Sidling into single phase
Dell’Oro Group Research Director Lucas Beran told Silverlinings LiquidStack has historically played in the two-phase liquid cooling market, ranking as one of the market leaders. The company's new single-phase liquid cooling system will put it into competition with a different segment of the market that includes the likes of Asperitas, Submer, GRC and Iceotope.
LiquidStack’s single-phase system will be available for pre-order on December 1 and is capable of cooling 110 kW per tank. Each tank takes up the same amount of space as four typical 19” or 21” racks, and “is designed to enable data centers to easily retrofit existing white space,” the company said in a press release.
Beran noted LiquidStack’s expansion into single-phase cooling follows an announcement from 3M late last year that it would stop manufacturing per- and polyfluoroalkyl substances (PFAS), which are a critical but controversial chemical in the liquid used for two-phase systems. Given 3M’s size and the fact that new fluids won’t be available until 2025, the announcement rocked the market.
The analyst said LiquidStack could be “biding their time” with a single-phase system that can be used in the near term while new two-phase fluids mature.
Capes told Silverlinings the company began work on its single-phase solution about six months before the 3M announcement and pointed out that funding it secured in a Series B round back in March was always intended to be used in part for portfolio diversification. However, he acknowledged that the 3M PFAS news accelerated its work.
Pros and cons
Both Beran and Capes said single-phase cooling a bit less efficient and less effective than two-phase cooling. On the high end, they said single-phase will likely be able to cool chips up to 1,000 watts. While that might seem like a lot given today’s chips range from 400-700 watts, Capes noted the roadmaps from semiconductor companies call for up to 1,500-watt chips.
Still, Capes said there’s plenty of room for single-phase solutions in the market given single-phase and two-phase systems each come with trade-offs.
For instance, the price of fluids used in single-phase tanks is “a fraction of the cost” of those used in two-phase systems, but they need to be replaced much more frequently – every five years or so compared to every 20-30 years for the latter.
“There’s pros and cons, and I think that’s part of the reason we’re diversifying our portfolio,” he concluded. “Certain technologies play well under certain circumstances and others don’t.”