Cooling is one of the largest and least visible costs in running a data center. Every server rack generates heat, and traditional air-cooling systems have to work harder as compute density rises — which is exactly the direction the industry has been moving for years.
The problem with air
Air cooling was never particularly efficient. It requires moving enormous volumes of air, conditioning that air, and constantly fighting the physics of heat transfer through a medium that isn’t great at carrying heat away. As server density increases, the cost and energy draw of air cooling scales right along with it.
What immersion cooling changes
Immersion cooling submerges servers directly in a dielectric fluid engineered to conduct heat without conducting electricity. Liquid is dramatically more efficient at transferring heat than air, which is why the approach can meaningfully cut both power utilization and cooling costs compared to a conventional air-cooled facility.
This is the technology behind our portfolio company, Midas Immersion Cooling, which brings immersion cooling systems to data center operators looking to control costs as compute demand grows.
Why this caught our attention as investors
We look for real, structural cost advantages, not incremental improvements. Immersion cooling isn’t a marginal tweak to an existing system — it’s a different physical approach to a problem that gets more expensive every year as data centers scale. That kind of structural advantage is the sort of thing we look for across every sector we invest in, not just technology.
Where this goes next
As compute demand continues to climb, driven by everything from cloud infrastructure to AI workloads, the economics of cooling only become more important. We think the operators who solve this efficiently will have a durable advantage — and we’re glad to have a stake in a company helping them do it.