GPUs are so hot right now – literally and metaphorically – that they’re driving mergers and acquisitions in the datacenter cooling industry.
On Tuesday, aircon company Trane acquired yet another liquid cooling startup, LiquidStack.
You may recall LiquidStack was one of the early players in two-phase immersion cooling, and first dunked servers into tanks of dielectric liquids to cool down crypto mining operations.
Microsoft was among the first to trial LiquidStack’s tech all the way back in 2021. Since then, the company has expanded its portfolio to include both single-phase and dual-phase immersion tanks, plus direct-to-chip cooling technologies, including a rather beefy 10MW modular coolant distribution unit (CDU).
Under the arrangement announced today, LiquidStack will continue to operate under Trane’s commercial HVAC business unit.
LiquidStack’s tech adds to Trane’s existing datacenter physical infrastructure portfolio, a segment that has become big business in recent years as demand for AI and other hot infrastructure grows.
By 2030, analyst firm Dell’Oro Group predicts, the datacenter physical infrastructure market will exceed $80 billion. One of the fastest-growing segments in that market is thermal management, which the analyst outfit predicts will achieve a compound annual growth rate of 20 percent.
By the end of the decade, Dell’Oro says, direct-to-chip liquid cooling alone will be an $8 billion business driven in large part by the tech that featured in many Super Bowl ads: AI.
Liquid cooling is no longer a nice-to-have but a requirement to get the most out of the latest AI hardware, which makes thermal management tech a potential bottleneck for adoption.
LiquidStack isn’t Trane’s first foray into liquid cooling. Back in December 2025, the company snapped up Stellar Energy, which produced modular cooling plants and coolant distribution units for, among other things, datacenters.
But these are only the latest in a string of datacenter physical infrastructure M&A kicked off by the AI boom. In late 2024, Schneider Electric acquired a 75 percent controlling interest in liquid cooling vendor Motivair with plans to purchase the remaining 25 percent by 2028.
Roughly a year prior, Vertiv purchased CoolTera and almost immediately sent the company’s manufacturing line into overdrive increasing production of CDUs by 45x.
Trane expects to close the acquisition of LiquidStack early this year. ®