Liquid cooling has moved from a specialist option to the standard design for new AI data centres in Australia. NEXTDC's M4 in Port Melbourne is designed for direct-to-chip cooling at up to 1,000 kW per rack. NEXTDC's S7 campus plans closed-loop liquid cooling for its OpenAI-linked AI campus. CDC's Perth campus and Macquarie Data Centres' IC3 Super West are both built for liquid-cooled, high-density compute.
The Role of Liquid Cooling in Data Centres
Water and other coolants remove heat far more effectively than air. At GPU densities, liquid cooling is what makes the racks workable. The main approaches:
Direct-to-chip (D2C)
Cold plates mounted on CPUs and GPUs carry coolant that absorbs heat at the source. A coolant distribution unit (CDU) circulates coolant through a secondary loop to the racks and transfers heat to the facility water system. Most new Australian AI builds use this approach.
Immersion
Servers are submerged in a dielectric (non-conductive) fluid, in single-phase or two-phase systems. It supports very high densities but needs servers designed or modified for immersion, and different maintenance practices.
Rear-door heat exchangers
Water-cooled coils on rack doors capture heat before it enters the room. Often used to raise density in existing air-cooled halls.
Key Infrastructure Requirements
- CDUs: in-row or in-rack units sized for current and future rack loads, with redundancy
- Coolant loops: secondary loop pipework to every rack position, with manifolds, quick-disconnects, filtration and leak detection
- Facility water system: the primary loop linking CDUs to chillers or dry coolers. Warm-water designs can reject heat without compressors for more of the year
- Coolant chemistry and quality: treatment, monitoring and filtration to protect cold plates
- Structural and layout: heavier racks and piping routes affect floor loading and hall layout
- Hybrid air cooling: residual heat from liquid-cooled racks and other equipment still needs air handling
- Heat rejection: closed-loop dry or adiabatic rejection is increasingly required to meet water rules
Retrofitting
Retrofitting liquid cooling into existing halls is possible but limited by floor loading, space for CDUs and piping, the capacity of the facility water system, and electrical capacity. Rear-door heat exchangers and in-row CDUs are the usual retrofit routes.
Water
Closed-loop liquid systems use very little water. That is one reason Australian AI projects stress non-potable or zero-water designs:
- NEXTDC M4: non-potable recycled water
- NEXTDC S7: closed-loop, "without relying on potable water"
- CDC Perth: "zero water consumption for primary cooling"
- Firmus Southgate: more than 99% reduction in water use compared with standard data centres (Firmus claim)
Australian Liquid Cooling Suppliers
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| Type | Typical scope |
|---|---|
| CDU and cold plate manufacturers and distributors | Equipment supply and support |
| Immersion system suppliers | Tanks, fluids, integration |
| Mechanical contractors with liquid cooling capability | Secondary loop installation, commissioning |
| Fluid and water treatment specialists | Coolant quality management |
| Leak detection and monitoring | Sensors, integration with BMS |
Selecting a Supplier
- Proven deployments at GPU densities, ideally with the same server platforms (NVIDIA Blackwell and GB300-class systems are referenced in Australian announcements).
- Commissioning methodology: flushing, pressure testing, fluid quality verification and failover testing.
- Local service: CDU spares and technicians in the same city.
- Integration with the facility water system and BMS.
- Future headroom: can the design handle higher rack densities and different coolant temperatures in later GPU generations?
- Cost awareness: Turner & Townsend reports a 7 to 10% average premium for liquid-cooled facilities in the US compared with air-cooled facilities of similar capacity.
Current Project Demand
Most new AI capacity announced in Australia is specified for liquid cooling:
| Project | Liquid cooling detail | Stage |
|---|---|---|
| NEXTDC M4 | Direct-to-chip, up to 1,000 kW racks | Approved Jan 2026 |
| NEXTDC S7 | Closed-loop high-density liquid cooling | Prepare EIS |
| CDC Perth | Advanced liquid cooling, closed loop | Construction |
| Macquarie IC3 Super West | Built for liquid cooling demands | Opening slated Sep 2026 |
| Firmus Southgate (Tasmania, Melbourne) | GB300-class GPU deployments; PUE 1.10 reported | Under construction and deployment |
Relevant Data Centre Projects
See AI data centres in Australia for all AI-focused projects and Australian data centre projects for the full database.
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