Microsoft and at least a dozen startups are testing nonconducting liquids to cool servers in data centers, where almost half of the power is used for cooling
All those videos, emails, bank statements, photos, shopping carts, airline reservations, and so, so, so much more sluicing around … Tweets: @bitfurygeorge , @timsteno , @mathiswilliam , and @ivanlevingston Tweets: George Kikvadze / @bitfurygeorge : Data centers consume as much as 4% of global electricity, and almost half of that for cooling. Excited for our company @liquid_stack working with @Microsoft to eliminate lots of energy waste! #ESG @BitfuryGroup https://www.bloomberg.com/... Tim Stenovec / @timsteno : Between 2 and 4 percent of the world's electricity goes to data centers. https://www.bloomberg.com/... Will Mathis / @mathiswilliam : It takes a ton of air conditioners and a lot of electricity to keep the world's millions of data centers running. A load of liquid cooling startups are betting they have the answer to cut energy and still keep computers cool @BW with @IvanLevingston https://www.bloomberg.com/... Ivan Levingston / @ivanlevingston : THREAD: Data centers use from 2%-4% of the world's electricity. And almost half of that goes just to keeping them cool! Excited about our story in @BW about one solution to cut that and save billions of $$ W/ @MathisWilliam @RealDavidRocks @climate https://www.bloomberg.com/...
Context & Ripple Effects
In June 2021 Microsoft was working with Liquid Stack — the Bitfury-linked startup whose George Kikvadze flagged the stakes: data centers consume up to 4% of global electricity and spend nearly half of it on cooling — plus at least a dozen other startups testing nonconducting liquids that touch servers directly instead of chilling air. The move sits inside Microsoft's broader resource-efficiency arc: months earlier it had joined the hyperscalers' clean-energy procurement race, and by October it set a 95% water-reduction target for its data centers.
First-order effects
- Microsoft's own fleet gets an immediate energy win: cutting the ~half of data center power devoted to cooling translates directly into lower operating costs and progress toward its 2030 climate commitments.
- Liquid-cooling startups gain a hyperscale reference customer in Microsoft, validating their technology for enterprise buyers who won't run unproven thermal systems in production.
Second-order effects
- Rival hyperscalers are pushed to answer on two fronts — Amazon, Google, and Microsoft end up tinkering with cooling options and siting new capacity in colder countries as heat and water stress make conventional air-cooled designs harder to defend.
- Cooling shifts from commodity infrastructure to a competitive differentiator, pressuring suppliers of chillers, fans, and raised-floor systems as direct-to-chip and immersion designs change what a data hall needs.
Third-order effects
- If the pattern holds, cooling becomes a first-order design axis rather than an afterthought: Microsoft's later zero-water cooling design shows the liquid experiments maturing into standard architecture, while Hailanyun's wind-powered underwater data center near Shanghai — built on underwater-sealing techniques Microsoft pioneered in 2014 — points to siting itself becoming part of the thermal solution.
- Regulators and ESG investors gain a measurable lever over cloud providers, since water and power draw per compute unit become reportable metrics that shape where AI-era capacity can physically be built.
The trend: Data center design is being reorganized around resource constraints — power, water, and heat — with cooling technology and site selection replacing raw server specs as the hyperscalers' key efficiency battleground.