A procurement team from Google's Taiwan operations traveled to China this month to meet with Envicool and at least one other manufacturer about purchasing liquid cooling equipment for AI data centers, according to Reuters, citing people with knowledge of the visit.
The trip underscores a supply problem that the entire hyperscale sector is now contending with. The global market for AI server liquid cooling systems is projected to reach more than $17 billion in 2026, up from $8.9 billion last year, according to JPMorgan. Demand from Nvidia GPU deployments and custom AI chip programs has outpaced what existing Western and Taiwanese suppliers can manufacture. Google, apparently, has decided the supply gap matters more than the geopolitical optics of sourcing thermal infrastructure from China.
Envicool, founded in Shenzhen in 2005, has a market capitalization of 98 billion yuan, roughly $14 billion. Revenue surged 40% during the first nine months of the year. At a recent industry event, the company showcased a coolant distribution unit built to Google's specifications, a detail that suggests the relationship between the two companies extends beyond a cold call from a buyer to a component catalog.
According to a Goldman Sachs analysis, Envicool projects continuous quarter-over-quarter revenue expansion in its liquid cooling division throughout 2026. Fifth-generation CDU orders from Google remain under active consideration. The company has announced plans for a manufacturing facility in Guangdong province, with additional production sites underway in Thailand and the United States.
Google is not the only hyperscaler turning to Chinese suppliers. The race to build AI data center infrastructure has tightened supply of not just advanced chips but also the lower-value equipment that makes those chips functional, including CDUs, cold plates, manifolds, and quick-disconnect fittings. Lead times have stretched across the industry. Vendors who can ship on schedule hold leverage regardless of where they are headquartered.
Other prominent participants in the Chinese liquid cooling supply chain include Lingyi iTech and Feilong Auto Components, alongside server manufacturers like Lenovo that have integrated liquid cooling into their production lines.
The geopolitical dimension is hard to ignore. U.S.-China tensions have reshaped semiconductor supply chains, restricted chip exports, and forced both countries to build parallel technology ecosystems. Liquid cooling hardware does not fall under existing export controls, but the fact that a major American technology company is traveling to China to source data center infrastructure illustrates how the AI buildout's physical demands can override political friction. When the supply constraint is binding and the product is available, procurement teams go where the parts are.