Grundfos pins China as key market for data center cooling amid AI boom

Danish pump and water solutions provider Grundfos expects China to become a key growth market for advanced data center cooling as the rapid expansion of artificial intelligence raises computing density and puts mounting pressure on electricity and water supplies, a senior executive said.

Data center solutions have grown from a niche operation into one of Grundfos' core businesses over the past few years, said Julian Trascasa Cano, the company's vice-president for industry solutions and marketing. Cano told China Daily that he expects strong demand growth to continue for at least three years, with data center cooling among the company's fastest-growing markets globally and in China.

"Data requirements in the world are growing exponentially, and that trend is only going to accelerate with the AI and digital twin era," Cano said. "That brings us to what we call the density dilemma."

The expansion is particularly significant in China, whose intelligent computing capacity reached 2,185 exaflops by the end of June, up 177 percent year-on-year, according to the Ministry of Industry and Information Technology. The overall utilization rate of the country's computing facilities stood at 71.4 percent.

That expansion is also changing how the industry defines a green data center. The sector is shifting from standalone energy-efficiency improvements toward coordinated management of computing power, energy and water resources, the China Academy of Information and Communications Technology said in a written response. The challenge is to improve energy and water efficiency and infrastructure resilience while expanding computing capacity, it said.

CAICT and Grundfos on Thursday jointly released a white paper examining that challenge at an industry conference in Beijing. The institute said fluid systems linking computing equipment with cooling, energy and water systems were becoming increasingly important to data centers' overall efficiency.

As AI chips consume more power and racks become denser, conventional air cooling is increasingly unable to remove heat quickly enough. Nearly all electricity consumed by a data center ultimately becomes heat, making fluid systems critical to performance and equipment safety, Cano said.

The white paper argues that the environmental performance of data centers can no longer be assessed by electricity efficiency alone. Operators must balance power use, water consumption and operational resilience, particularly as more facilities adopt liquid cooling.

Liquid cooling transfers heat more effectively than air, but does not automatically reduce overall energy or water consumption. Its environmental impact depends on factors including whether a facility uses open evaporative cooling or a closed-loop system, local climate and water availability, and how pumps and cooling equipment respond to changing computing loads.

This is especially relevant to China's computing hubs in the western regions, where cooler climates and abundant renewable electricity can reduce cooling requirements, but water scarcity may make even relatively modest consumption a burden on local resources.

The white paper proposes a three-layer framework covering system architecture, equipment and digital-management platforms. It calls for demand-based cooling distribution, intelligent pump controls, leak monitoring, heat recovery and closed-loop adjustment of cooling systems.

Cano said better coordination between computing loads, cooling equipment and water flows could cut total electricity use by as much as 12 percent in a well-run data center, without requiring large-scale replacement of existing assets. The estimate would vary according to facility design and operating conditions.

The surge in data center demand has already helped lift the Danish company's results. Grundfos reported revenue of 17.9 billion Danish krone ($2.78 billion) in the first half of 2026, with sales rising 7.7 percent in local-currency terms. It identified data center solutions as a key growth driver, particularly in the United States, where overall company sales rose by more than 20 percent.

Data centers are a strategic focus and growth driver for Grundfos in China, Cano said, as the acceleration in local demand has only recently begun. But he expects the business to move quickly toward the company's global level as Chinese cloud service providers and technology companies increase AI investment.

Grundfos operates manufacturing plants in Suzhou and Changshu, Jiangsu province and Shanghai's Minhang district, as well as local research and development operations. Cano said the company had established an end-to-end China operation spanning product development, manufacturing and delivery, and would continue investing to expand capacity.

The company is developing digital pump platforms and advanced control systems with Chinese customers, allowing cooling output to adjust dynamically to real-time demand. Some of these locally developed technologies are being introduced elsewhere in Asia and in Western markets, Cano added.

Conventional data centers still consume more energy and water in aggregate than AI facilities, but AI workloads are expanding much faster. Cano expects AI to become the largest source of incremental energy and cooling demand in data centers.

"The opportunity is to expand computing power in a responsible manner," he said. "The challenge is too large and too complex for any company to solve in isolation."