Data center
chips generate large amounts of waste heat that must be managed with cooling.
Air cooling is inadequate and thermodynamically impossible to scale. Water
conducts heat far better (25-30 times better) than air and has a vastly higher
(by 3,400 times) volumetric heat capacity. Thus, liquid cooling is required for
the NVIDIA Blackwell GPU chips that draw power to process data center
computing. NVIDIA's next-generation Rubin platform is projected to
push rack densities beyond what they are now.
Ryan Cook of Tech Times gives a
detailed analysis and explains the recent purchase by oilfield services giant
SLB of German heat exchanger manufacturer Kevlion:
“SLB (NYSE: SLB), the century-old oilfield services
company, bet $4.1 billion this morning on the argument that the people who know
how to solve extreme heat problems are not software engineers or chip
architects — they are the industrial engineers who have spent a century
managing thermal extremes on offshore platforms, in arctic drilling sites, and
in desert refinery fields. In a definitive agreement announced Monday, SLB
agreed to acquire Kelvion — a German manufacturer of heat exchangers and
cooling systems for data centers and industrial processes — from Apollo-managed
funds for approximately $3.4 billion in cash, plus the assumption of roughly
$0.7 billion in existing debt, per the SLB Kelvion acquisition terms. The deal,
valued at approximately 11 times Kelvion's estimated 2026 adjusted earnings
before interest, taxes, depreciation, and amortization, is expected to close in
the first half of 2027, pending regulatory approvals.”
Below, he touches on
direct-to-chip cooling, which I posted about here, and heat exchangers and air-fin coolers
that dump waste heat into the atmosphere, although, as I posted about here, in the future could be recovered and
utilized at lower temperatures than previously.
“The cooling architecture that replaces air involves
several layers. At the chip level, direct-to-chip cold plates — metal plates
bonded directly to the GPU die — circulate water or a water-glycol mixture
through the processor, achieving chip-level thermal capture efficiency of 80 to
95 percent at the source. A Coolant Distribution Unit manages flow,
temperature, pressure, and heat exchange within the rack. The CDU connects to a
facility-level loop that routes warm coolant to large outdoor heat rejection
systems — the heat exchangers and air-fin coolers that ultimately dump waste
heat into the atmosphere.”
Kevlion makes GigaBay air-fin
coolers, large modular heat rejection units with fans up to 22 feet (6.7
meters) in diameter. The company was recently contracted for deployments at 200
MW and 350MW U.S. data centers, respectively.
"Data centers are becoming more sophisticated and
energy-intensive, and customers are increasingly looking for partners that can
optimize how critical systems work together across the facility and help bring
new capacity online faster," said Gavin Rennick, president of SLB's New
Energy and Industrial business, in a statement. "Thermal management is
central to that challenge."
SLB began manufacturing modular
data center components at its plant in Shreveport, Louisiana, in 2023, the
largest dedicated data center manufacturing facility in North America. With the
addition of Kevlion’s heat exchanger technology, SLB is now capable of full
thermal management at data centers.
"This is not an oil and gas business," SLB CEO
Olivier Le Peuch said in an October 2025 interview, elaborating on his
oilfield-to-AI pivot strategy. "It's driven by hyperscalers, partners that
reach out to us to help them respond to the AI boom and data center growth that
I think will last beyond this decade."
“In March 2026, SLB formalized its position in the
hyperscaler supply chain by becoming the SLB NVIDIA DSX design partner for
NVIDIA's DSX AI factories — a designation that puts SLB inside the NVIDIA
reference architecture that hyperscalers use when deploying dense AI clusters.
Kelvion adds the one major capability that stack has lacked: full thermal
management integration from chip-level coolant loops to facility-level heat
rejection.”
"This transaction accelerates our ambition to
become an industrial technology partner to the data center industry," Le
Peuch said in Monday's SLB Kelvion acquisition announcement, "and help
customers address the growing infrastructure complexity required to scale AI."
Cook writes that SLB’s projected
data center revenue “would rank it among the largest dedicated data center
infrastructure businesses in the world.” He also notes that data center
liquid cooling deals have resulted in significant consolidation in the
industry, as noted below.
“The consolidation pattern reflects a shared thesis:
that the transition from air cooling to liquid cooling at scale is a multi-year
structural shift with winner-take-most economics at the integration layer. A
hyperscaler that can procure modular enclosures, power distribution, liquid
cooling loops, and facility-level heat rejection from a single
engineering-accountable vendor faces far less integration risk than one
assembling the same stack from five separate suppliers.”
“SLB's acquisition of Kelvion completes a stack that
includes modular manufacturing, offsite construction, engineering, and digital
capabilities — with thermal management now integrated directly from the ground
up, rather than bolted on by a separate vendor.”
He also cites Goldman Sachs projections that liquid-cooled AI servers will represent 76% of deployments by the end of 2026, up from just 15% in 2024. The liquid cooling market is expected to grow by nearly seven times, from $4 billion in 2026 to $27 billion by 2033, a compound annual growth rate of more than 31%.
Kevlion also makes heat pumps and
components for renewables infrastructure, carbon capture, and broader
industrial processing, all markets where thermal management is gaining
strategic importance.
There are, however, some
significant engineering challenges remaining for liquid cooling, including
coolant chemistry management and biofilm/biofouling, which causes system
corrosion, and preventing and mitigating pump failures.
“Coolant chemistry management remains a documented
operational risk. Glycol concentration below roughly 25 percent propylene
glycol carries liquid cooling glycol biofilm risk of bacterial biofilm that
does not reliably inhibit fouling — biological contamination that insulates
heat transfer surfaces, generates particulates, and drives corrosion in CDU
loops. Pump failures in liquid-cooled systems cause far more immediate GPU
damage than air cooling failures, because GPUs have no thermal buffer when
coolant stops flowing — damage can begin within seconds.”
Another challenge is that due to
tariff pressures, some of Kevlion’s manufacturing capabilities in France and
China will likely have to be duplicated in SLB’s U.S.-based facilities.
Finally, Cook notes that
integration of heat management with modular component and power system
manufacture gives consolidated companies full-stack data center approaches that
synergize.
“For enterprise technology buyers and data center
operators, the SLB-Kelvion deal signals that the market for integrated AI
infrastructure — combining modular construction, power systems, and full-stack
thermal management — is consolidating rapidly around a small number of
industrial-scale vendors. The window for assembling best-of-breed cooling
stacks from independent specialists is narrowing as those specialists are
acquired.”
Below is a data center liquid
cooling market outlook from Enki AI:
References:
SLB
acquires Kelvion for $4.1B: Air cooling fails AI math, oilfield engineers win. Ryan
Cook. Tech Times. August 31, 2026. SLB acquires Kelvion for $4.1B: Air
cooling fails AI math, oilfield engineers win
Data
Center Liquid Cooling Deals, Top 10: $9.5 B Eaton Acquisition, $40 B Aligned
Buyout (2024 to 2026). Enki AI. Eaton
Liquid Cooling 2025, $9.5B Boyd Acquisition - ENKI
No comments:
Post a Comment