The 'Coolest' Part of the AI Revolution

Why HVAC is the New Mission-Critical Tech

When we talk about the AI boom, the conversation usually centers on high-powered GPUs, massive neural networks, and the race for "compute." But there is a silent, physical bottleneck threatening to halt this progress: heat.

As AI workloads intensify, the systems designed to keep them cool are no longer just "background building components." They have become mission-critical infrastructure that determines the very scalability of the digital world.

Our latest whitepaper, Cooling the Future: How Are HVAC Systems Powering Data Centers and the Next Wave of Energy Infrastructure?, dives deep into why the HVAC (Heating, Ventilation, and Air Conditioning) industry is the unsung hero of the next infrastructure cycle.

The Infrastructure Bottleneck No One Is Talking About

Data centers are energy-hungry giants. In 2024, U.S. data centers consumed approximately 183 terawatt-hours (TWh) of electricity—roughly 4% of total U.S. demand. By the end of 2025, that number is projected to exceed 200 TWh.^1,2

The challenge? Cooling alone can account for 37% to 40% of a data center’s total energy consumption. As server racks move from traditional 5–10 kilowatt (kW) densities to AI-ready 100+ kW densities, traditional air cooling is reaching its physical limits.³

The Shift to Liquid Cooling

We are witnessing a massive architectural shift from air-based cooling to liquid cooling. Technologies like direct-to-chip and immersion cooling are no longer niche; they are becoming foundational for AI. Why?

• Energy Efficiency: Liquid cooling can reduce cooling-related energy use by up to 40%.⁴
• Density: It allows for rack densities more than three times higher than air cooling.
• Sustainability: It significantly reduces water usage in large-scale facilities.

This segment is expected to grow at a 20% CAGR, outpacing the broader HVAC market as hyperscale operators scramble to upgrade their facilities.⁵

Why HVAC is an Investment Opportunity

While pure-play tech stocks often capture the headlines, HVAC companies with "data center exposure" offer a different kind of growth story. These companies benefit from:

• Longer Asset Lifecycles: Cooling infrastructure is built for decades, not just a few software cycles.
• Recurring Revenue: Service and maintenance contracts provide steady income streams.
• Massive Backlogs: Companies like AAON are reporting record backlogs (e.g., $650 million as of Q2 2024) driven by data center demand.⁶

Powering the Future with Nuclear

The whitepaper also explores a fascinating convergence: the return of nuclear power. Major tech players are looking toward nuclear energy to provide "firm," reliable, round-the-clock power to support these massive cooling loads. This integrated approach—pairing stable energy with advanced thermal management—is the new blueprint for AI infrastructure.

The future of digital infrastructure won't just be defined by how fast we can process data, but by how efficiently we can manage the heat it creates. Read our whitepaper, "Cooling the Future," to explore the technologies, market trends, and companies leading this cooling revolution.

1. Pew Research Center. US Data Centers' Energy Use Amid the Artificial Intelligence Boom. 2025.
2. AEI Magazine. SolarTech. How Much Electricity Does a Data Center Use? Complete 2025 Analysis. January 1, 2026.
3. McKinsey & Company. Investing in the rising data center economy. January 17, 2023.
4. STL Partners. Data center liquid cooling in 2025: Evidence, economics and the road to mainstream adoption. 2025.
5. Fortune Business Insights. Data Center Cooling Market Analysis – 2034. January 2026.
6. AAON. Press Release. AAON Reports Record Sales, Earnings & Backlog for the Second Quarter Of 2024. August 2024.