Trane Technologies to buy LiquidStack in AI cooling push

Trane Technologies has agreed to acquire LiquidStack, a specialist in liquid cooling for data centres, as demand grows for higher-density computing driven by generative AI and hyperscale workloads.

The deal follows Trane's minority investment in LiquidStack in 2023. Financial terms were not disclosed. The companies expect the transaction to close in early 2026, subject to customary conditions.

LiquidStack, headquartered in Carrollton, Texas, develops liquid cooling systems used in data centres and high-performance computing environments. Its product line includes direct-to-chip cooling and immersion cooling, which submerges servers and other IT hardware in a dielectric liquid designed to carry heat away more effectively than air-based approaches.

Data centre operators have been revisiting cooling architectures as chip power consumption increases and workloads linked to AI training and inference become more variable. Those shifts have increased interest in systems that manage heat closer to the processor and reduce reliance on traditional airflow inside server racks.

Broader portfolio

The acquisition expands Trane's data centre thermal management offering across central plant equipment and rack-level cooling, spanning chillers, heat rejection, controls, liquid distribution and on-chip cooling.

Liquid cooling has become a focal point for suppliers to the data centre sector. Direct-to-chip methods circulate coolant through cold plates attached to processors. Immersion cooling removes heat by submerging equipment in specially formulated fluids. Both approaches aim to address thermal constraints in dense racks, where air cooling can struggle to keep temperatures within operating limits.

Holly Paeper, President, Commercial HVAC Americas at Trane Technologies, said customers are asking for integrated approaches that span from facility systems to chip-level cooling.

"Rising chip‐level power and heat densities combined with increasingly variable workloads are redefining thermal management requirements inside modern data centers," Paeper said.

LiquidStack's operations include manufacturing, engineering and research and development in Texas and Hong Kong. The acquisition includes LiquidStack's global team.

After the transaction closes, LiquidStack will operate globally within the Commercial HVAC business unit of the Trane Technologies Americas segment. Trane sells heating, ventilation and air conditioning equipment and services under the Trane and Thermo King brands.

Leadership continuity

LiquidStack co-founder and Chief Executive Joe Capes will join Trane in a leadership role and continue to lead the LiquidStack business.

"LiquidStack has been on a mission to innovate and deliver the most advanced, powerful and sustainable liquid cooling solutions. Joining Trane Technologies enables us to accelerate that mission with the resources, scale and global reach needed to power next‐generation AI workloads in the most demanding compute environments. We are very excited to expand our impact and continue our growth as part of Trane Technologies," Capes said.

The acquisition moves Trane more directly into a segment where equipment suppliers, data centre operators and chipmakers are reshaping infrastructure designs. Higher rack densities and fast-deploying modular data halls are pushing cooling systems to evolve alongside power distribution and server architecture.

LiquidStack has focused on high-density deployments, where operators seek alternatives to increasing fan speeds and moving larger volumes of air through racks. Immersion and direct-to-chip systems can also change mechanical plant design, since heat can be collected and transported in liquid loops with different temperature profiles than air systems.

For Trane, the deal also adds specialist engineering and manufacturing capacity focused on liquid cooling equipment. It builds on the relationship established with the 2023 minority investment, shifting LiquidStack from partner to integrated business unit.

The transaction comes alongside other portfolio changes at Trane. The company recently announced an agreement to acquire Stellar Energy, an energy solutions and industrial HVAC firm, which is expected to close in the first quarter of 2026.

Trane described the LiquidStack purchase as a bolt-on acquisition aligned with its strategy of adding technologies adjacent to its core businesses and scaling them over time.

Regulatory approvals were not detailed. The companies expect to complete the transaction in early 2026.