Cooling technology emerges as new bottleneck in AI race, Samil PwC says

The AI industry's competitive focus is shifting from securing GPUs to managing heat. As power consumption and heat generation at AI data centers surge, cooling technology has moved beyond a supporting role to become a decisive factor in the success or failure of AI infrastructure.

Samil PwC released a report Wednesday titled "Those Who Master Heat Will Master AI: Cooling Technology Rises as the New Bottleneck of the AI Era," saying cooling has emerged as a new chokepoint amid the global AI boom. The report outlines structural changes in the cooling industry, the global competitive landscape and strategic directions for Korean companies.

According to the report, the rapid rise in power density and heat output from AI servers has made efficient use of limited power and space the defining measure of data center competitiveness. Cooling technology, at the center of this shift, is described as a "leverage technology" — one that enables more AI computation within the same power environment.

As the importance of cooling grows, the market is tracking a steep upward curve. The global data center cooling market is projected to expand from $21 billion this year to $54.4 billion by 2034, growing at an average annual rate of 12.6%.

Immersion cooling — which removes heat by submerging entire servers in dielectric fluid — is expected to lead the market, with projected annual growth exceeding 24%. Together with direct-to-chip liquid cooling, which presses a cold plate directly against the chip, immersion cooling is considered one of the two pillars of the next-generation cooling market. Both technologies are rapidly establishing themselves as core infrastructure for ultra-high-density data centers, surpassing the limits of conventional air cooling.

Global data center cooling market outlook [Samil PwC]

The report also said the industry's value center is shifting from equipment sales to integrated operations platforms. Future competitiveness, it argued, will be determined less by cooling hardware itself than by the ability to manage power, cooling and control in an integrated system. As AI-driven autonomous cooling technology spreads, the cooling industry is evolving into a data-driven operations business and expanding into new growth areas such as waste heat utilization and modular and edge data centers.

In the global market, Vertiv, Schneider Electric and Johnson Controls are securing proven technologies through mergers and acquisitions while locking in industry standards through official reference partnerships with Nvidia. Adjacent-industry giants are also entering the field: water treatment company Ecolab acquired CoolIT, and power management firm Eaton acquired Boyd Thermal, each in deals worth trillions of won.

Korean companies are attempting to enter the market by leveraging strengths from adjacent industries. SK Enmove is supplying insulating fluid for immersion cooling — developed using its lubricant technology — to SK Telecom's data center as the first commercial deployment, and has taken an equity stake in global firm GRC. GST has secured commercial orders for its proprietary immersion cooling technology, while Samsung Electronics has acquired European air-handling company Fläkt, and LG Electronics is expanding its HVAC capabilities, including oil-free turbo chillers.

However, the report said Korean companies' moves remain largely at the proof-of-concept and early commercialization stages. Compared with global leaders, they lag in system and platform capabilities and in integration into the "standard ecosystem," including Nvidia's supply chain.

Samil PwC recommended that Korean companies pursue a "Niche-to-Alliance" strategy — concentrating on expertise in specific technology areas before forming global partnerships — rather than competing head-on with leading global players. The report added that the government should lay the groundwork for companies by streamlining immersion cooling licensing frameworks, establishing a national certification center, investing in research and development, and providing diplomatic support for global market access.

Seo Yong-tae, Samil PwC's AI data center platform leader, said the next two to three years will be "a decisive period in which global cooling standards are finalized," adding that "Korea must also move quickly to join the global standard ecosystem by drawing on the strength of its adjacent industries."

Meanwhile, Samil PwC — which closes its fiscal year in June — posted sales of 1.11 trillion won ($786 million) for the fiscal year ended June 2025, up about 8.4% from the same period a year earlier. Operating profit for the same period jumped 55.6% year-on-year to about 25.4 billion won, reflecting growth in both revenue and profitability.

an@heraldcorp.com