4 hot startups aim to keep AI data centers cool

One fact often lost in coverage of the enormous electricity appetite of artificial intelligence data centers: At least one-third of the power goes toward keeping the servers, networking gear, hard drives and other gadgets from overheating.

Yet, the market for data center cooling technologies is poised to double over the next seven years, reaching a projected $42.5 billion by 2032. The category includes both massive chillers that air condition entire data center halls to newer technologies that directly cool servers and equipment racks. And with growth in the latter segment expected to quadruple by 2033, dozens of companies are vying for that created revenue, including leaders in entire data center cooling that have been around for decades, such as CooIIT Systems, Boyd Corp. and Motivair.

As the market matures, innovation is heating up around an option known as direct-to-chip cooling, which involves installing a cold plate on top of central processing or graphics processing chips. Essentially, these technologies command servers to run cooler on their own, thus breaking the current reliance on more traditional center-cooling approaches that are notorious water guzzlers.

As sustainability teams continue to collaborate with counterparts in information technology on direct-to-chip cooling options, their work will increasingly shape decisions about the sorts of servers companies buy for their digital operations. For sustainability professionals who want to stay abreast of this industry trend, here are four startups with direct-to-chip offerings that have attracted notable funding and corporate support since 2020. 

Accelsius

Austin, Texas

Backstory: Founded in June 2022 by Innventure, using intellectual property originally developed by Nokia’s Bell Labs. Accelsius is commercializing a product called NeuCool, touting a industry-leading cooling capacity for NVIDIA chips that enables more equipment to be squeezed into data center racks.

Funding: $24 million Series A round in November 2024, led by Innventure; Accelsius already generates revenue. 

Key Alliances: Accelsius has a relationship with the world’s largest data center co-location company, Equinix. It also contributes to a U.S. Department of Energy program for cooler chips.

Alloy Enterprises

Burlington, Massachusetts

Backstory: Created in early 2020 to 3-D print EV parts and other components, Alloy jumped into direct-to-chip cooling in June. Spurred by inquiries from data center customers, it now produces customized copper parts that meet compatibility requirements of ASHRA, a big data center standards setter.      

Funding: $50 million in capital, including $40 million from such investors as Lockheed Martin and Robert Downey Jr.’s Footprint Coalition. 

Key Alliances: None disclosed.

JetCool

Littleton, Massachusetts

Backstory: Spun out of the Massachusetts Institute of Technology in 2019, the company’s first product integrates with PowerEdge servers from Dell Technologies. JetCool is working on a design with new owner, contract manufacturer Flex, that is compliant with servers built to Open Compute Project specifications.

Funding: $17 million in Series A funding in October 2023, led by Bosch Ventures, bringing total backing to $20 million; acquired by Flex in November 2024.  

Key Alliances: Dell, DuPont (which sells its products in Taiwan and Singapore) and Eaton (another sales partner).

Nexalus

Cork, Ireland

Backstory: Born in 2019 from research at Dublin’s Trinity College, Nexalus remains closely tied to the university. Its cooling technology has applications for data centers, gaming and the automotive sector — specifically, Formula 1 racing teams.   

Funding: Nexalus is backed by Science Foundation Ireland, Enterprise Ireland and the Connect Research Center; it also has raised $10 million from private investors.

Key Alliances: Dell, Hewlett Packard Enterprise and Intel are collaborating with Nexalus on data center integrations.