For decades, air cooling has been the standard for data centers. Rows of CRAC units, raised floors, and hot-aisle/cold-aisle containment kept servers running. But in 2025, that model is under pressure. The rise of AI workloads, GPU clusters, and high-density racks is straining the limits of air cooling. Energy efficiency mandates, water scarcity, and sustainability targets are accelerating the push for alternatives.
Enter immersion cooling, once a niche technology used for experimental high-performance computing, now becoming mainstream in hyperscale builds worldwide. By submerging servers in non-conductive liquids, immersion cooling offers unmatched thermal efficiency, reduced power consumption, and new design possibilities for data centers.
This article explores why immersion cooling is gaining adoption, how it works, the benefits and challenges, and why hyperscalers are making it central to next-generation campuses.
Why Air Cooling Alone No Longer Works
AI and GPU Density
Traditional enterprise racks consume 5–10 kW. AI racks, fueled by GPUs and accelerators, often require 40–100 kW per rack. Air cannot remove that much heat efficiently.
Sustainability Pressures
Data centers face intense scrutiny over energy use. Cooling accounts for 30–40% of total energy consumption. Air cooling at scale is no longer sustainable.
Water Scarcity
Evaporative cooling methods, common in hyperscale facilities, consume large amounts of water. In drought-prone regions, this model is increasingly untenable.
Together, these pressures make immersion cooling not just a choice but a necessity.
How Immersion Cooling Works
Immersion cooling involves submerging IT hardware in dielectric fluid that does not conduct electricity. Heat generated by the components is transferred directly into the liquid, which is then circulated and cooled.
Single-Phase Immersion
Servers are submerged in a bath of liquid coolant. Pumps circulate the fluid through heat exchangers to dissipate heat.
Two-Phase Immersion
Coolant boils at a low temperature, absorbing heat as it vaporizes. The vapor condenses on a heat exchanger and returns to liquid form, creating a highly efficient loop.
These systems eliminate the need for fans, reduce noise, and allow for far higher rack densities.
Benefits of Immersion Cooling for Hyperscale Builds
Unmatched Energy Efficiency
Immersion systems reduce cooling energy costs by up to 90% compared to traditional methods. This directly improves PUE (Power Usage Effectiveness).
Higher Rack Density
By eliminating air-cooling constraints, immersion supports ultra-dense GPU racks, enabling hyperscalers to maximize floor space and compute per square foot.
Sustainability Gains
Immersion reduces or eliminates water use, supporting ESG commitments. It also extends hardware lifespan by maintaining consistent thermal conditions.
Design Flexibility
Without the need for large air-cooling infrastructure, data halls can be designed more compactly. Hyperscalers can build modular immersion suites within mega campuses.
Reduced Noise and Maintenance
Fans are unnecessary, cutting noise pollution and lowering maintenance costs.
Global Adoption Trends
North America
Hyperscalers in Virginia, Texas, and Oregon are piloting immersion cooling for AI clusters. Several colocation providers are integrating immersion suites as part of their service offerings.
Europe
Sustainability mandates in the EU are driving early adoption. Providers in the Nordics are combining renewable energy with immersion cooling to achieve carbon-neutral operations.
Asia-Pacific
China and Japan are deploying immersion at scale, particularly in GPU-intensive HPC environments. Singapore’s cooling efficiency regulations are accelerating adoption across Southeast Asia.
Middle East
Saudi Arabia’s new mega campuses are designed with immersion cooling from the start, leveraging greenfield development opportunities.
Challenges to Overcome
CapEx Investment
Immersion systems are more expensive upfront than traditional cooling. For hyperscalers, the long-term ROI is clear, but smaller providers may hesitate.
Hardware Compatibility
Not all server designs are immersion-ready. Standardization efforts are underway, but retrofitting remains costly.
Fluid Management
Dielectric fluids are expensive, and managing leaks or replacements requires specialized expertise.
Operational Shifts
Immersion changes how data centers operate, from maintenance to monitoring. Staff training and new procedures are critical.
Case Studies: Hyperscalers Leading the Way
- Microsoft – Conducted trials with two-phase immersion cooling for AI training clusters, reporting significant energy savings.
- Meta – Exploring immersion for dense GPU workloads powering its generative AI models.
- Chinese Cloud Providers – Deploying immersion at scale in high-density campuses, reducing both cooling costs and space requirements.
These early adopters are proving immersion is not just feasible but transformative.
Implications for Colocation and Wholesale Markets
Colocation providers are beginning to offer immersion-ready suites to attract AI-focused enterprises. Wholesale tenants, especially hyperscalers, increasingly request immersion as part of long-term leases.
Providers that cannot support immersion risk losing competitive ground. Those who adopt early will attract high-value tenants and secure long-term partnerships.
The Future of Cooling in Hyperscale Builds
By 2030, immersion cooling could become the standard for AI and HPC workloads. Air cooling will remain for traditional enterprise deployments, but hyperscale campuses will likely feature mixed environments, with immersion dedicated to high-density zones.
Longer term, immersion may reshape the physical design of data centers entirely. Without reliance on air circulation, facilities can become smaller, denser, and more efficient, reducing land and energy footprints.
Why Immersion Cooling Is Moving Mainstream
The convergence of AI growth, sustainability mandates, and water scarcity makes immersion cooling the logical next step for hyperscalers. No longer experimental, immersion is proving itself in live deployments.
For real estate developers, investors, and operators, this means planning facilities with immersion compatibility baked in. For enterprises, it means access to more efficient colocation environments. And for the planet, it means a more sustainable digital future.
