Positive developments have emerged in the domestic liquid-cooled server sector. This afternoon (March 17), foreign media reported that Alphabet, the AI giant with a market capitalization exceeding $3.5 trillion, is in discussions with Chinese companies, including Shenzhen Envicool Technology Co.,Ltd., regarding the procurement of data center cooling systems. These negotiations underscore the intensifying global competition in AI data center infrastructure, which is not only increasing pressure on advanced chip supply but also impacting key equipment segments across the industrial chain.

In response to the rumors, an inquiry was made to Shenzhen Envicool Technology Co.,Ltd.'s securities office. Relevant staff responded that the securities department currently has limited information regarding client details or progress from the business division.

In the secondary market, Shenzhen Envicool Technology Co.,Ltd. has been a top-performing stock, with its share price surging over 400% in the past year. Specifically, the stock hit a low of 21.51 yuan per share in April last year before rebounding continuously, reaching a peak of 117.30 yuan per share by the end of last year—a gain of over 445%. Since the beginning of 2026, Shenzhen Envicool Technology Co.,Ltd.'s share price has maintained high-level volatility, with some adjustments observed in recent trading sessions.

A Favorable Rumor According to Reuters, sources familiar with the matter revealed that Alphabet's Google is negotiating with Shenzhen Envicool Technology Co.,Ltd. and other Chinese firms to purchase liquid cooling equipment for data centers. Previously, a Google procurement team visited China.

The report indicated that as high-density computing generates heat far beyond the capacity of traditional air-cooling systems, liquid cooling systems—which circulate water or other fluids around or over equipment surfaces—have become critical components in AI data centers.

Sources mentioned that the Google team met with Shenzhen Envicool Technology Co.,Ltd. during their stay in Beijing. Another independent source stated the team also planned to meet with at least one other company. The influence of Chinese suppliers in the global data center development landscape continues to expand.

In the secondary market, the Tongdaxin Liquid Cooling Server Index surged over 100% from April 9 last year to March 11 this year. During this period, Shenzhen Envicool Technology Co.,Ltd. rose more than 330%, while KeChuangXinYuan, Suzhou Tianmai, and Feilong Automobile Parts surged over 250%.

In recent trading sessions, liquid cooling server concept stocks have experienced adjustments. On March 17, the Tongdaxin Liquid Cooling Server Index fell over 3%, with JinFang Energy hitting the daily limit down, KangSheng Shares declining nearly 9%, and ShenLing Environment, TongFei Shares, and ZhongTian Technology dropping over 7%. Shenzhen Envicool Technology Co.,Ltd. decreased by 3.62%.

In recent months, market skepticism has grown regarding the return prospects of massive investments in AI infrastructure. Conflicts in the Middle East pose threats to semiconductor supply chains, and shortages of memory chips required for NVIDIA's products have contributed to Wall Street's lukewarm response to CEO Jensen Huang's optimistic earnings forecasts.

On Monday local time, NVIDIA CEO Jensen Huang stated that driven by the deployment of tools like Anthropic's Claude Code and OpenAI's OpenClaw, revenue in the AI chip sector is expected to reach at least $1 trillion within the next two years.

NVIDIA's revenue projection far exceeds Wall Street consensus, signaling the company's bet that the AI boom will continue to intensify. On Monday, NVIDIA's stock rose 1.65%. In pre-market trading on Tuesday, NVIDIA's shares showed slight volatility, currently up 0.11%.

Substantial Potential in Liquid Cooling Market A J.P. Morgan report indicates that driven by demand from NVIDIA and cloud service providers deploying custom AI chips, the global market size for AI server liquid cooling systems is projected to surge from $8.9 billion last year to over $17 billion by 2026.

According to IDC research, the compound annual growth rate of the global AI industry scale is expected to be 42% from 2022 to 2032, reaching $1.3 trillion by 2032.

Yongxing Securities pointed out that robust AI development and strong computing demand are continuously pushing liquid-cooled servers to become essential hardware. Meanwhile, leaps in chip and server performance have led to rapid increases in corresponding power consumption and cabinet power density. Following recommendations from ASHRAE, liquid cooling technology is advised when chip TDP exceeds 300W and cabinet power density surpasses 40kW. Chinese government departments have repeatedly issued policies encouraging enterprises to adopt new technologies, processes, and equipment to reduce data center energy consumption. Analysts from ZhongShang Industrial Research Institute predict China's liquid-cooled server market will reach 29.4 billion yuan by 2025, exceeding 40 billion yuan by 2027.

Galaxy Securities stated that with the explosion of AIGC, the thermal flux density of high-power chips has significantly increased, pushing traditional air cooling close to physical limits and making liquid cooling the preferred solution for high-power chip heat dissipation. They recommend three investment themes in liquid cooling: first, opportunities arising from NVIDIA's Blackwell GB300 chips, next-generation Vera Rubin chips, and new high-power smartphones; second, investment opportunities from high-power data centers adopting liquid cooling; third, liquid cooling opportunities in new energy vehicle power battery and energy storage heat management.

Reuters noted that at a recent industry exhibition, Shenzhen Envicool Technology Co.,Ltd. displayed cooling distribution units (CDUs) manufactured to Google's specifications, which are key components in liquid cooling systems that deliver coolant to server racks.

A Goldman Sachs report following an analyst meeting with the company this month indicated that Shenzhen Envicool Technology Co.,Ltd. expects liquid cooling business revenue to grow quarter-by-quarter this year, with potential orders including Google's fifth-generation CDUs and other components. The company also revealed plans to expand capacity at its new factory in Guangdong and advance production base construction in Thailand and the United States.

The liquid cooling market is highly segmented, with numerous suppliers providing different system components. Benefiting from strong domestic demand, Chinese suppliers are gradually gaining market advantage through production scale and cost benefits from numerous local data center projects. Major suppliers include Lingyi Intelligent Manufacturing, Feilong Automobile Parts, and server manufacturers like Lenovo.

Other Chinese component suppliers benefiting from AI data center development include Zhongji Innolight and Accelink, which produce optical modules. Chinese manufacturers also dominate the printed circuit board market, with companies like Shenghong Technology including NVIDIA and Alphabet in their client lists.