Israeli waterless liquid cooling company ZutaCore, based in Sderot, has announced the completion of a $100 million Series C financing round led by investors like Mitsubishi Electric, Samsung and Carrier. The new funds will help the company expand into using its waterless, direct-to-chip, two-phase liquid cooling for Nvidia’s new Blackwall 300 (B300) AI servers and the electronic boards market for AI servers.
The AI processor data centers that are being built at a particularly fast pace to meet demand for AI often heat up to a temperature of 50-60 degrees without cooling, while installing a large number of servers at the same time can even reach boiling temperature. For this reason, companies such as Nvidia provide their own cooling product, while ZutaCore markets its solution to equipment suppliers for data centers.
The Israeli company has already installed its systems in dozens of data centers and last year announced a collaboration with Japan's SoftBank in the Stargate data center construction project, in which OpenAI, Oracle and Microsoft are also partners. According to current estimates, most of ZutaCore’s customers today are financial companies that require big AI servers for algorithmic trading or hedge funds, while in the coming year it is interested in breaking into additional markets such as the AI factories market, large data centers designed for AI processing and built by the cloud giants or neo-cloud companies that serve them.
ZutaCore chairman and CEO Erez Freibach tells "Globes," about the growing demand for AI server cooling systems: "Softbank announced an investment of hundreds of billions of dollars in the server sector and chose us as their cooling solution. We are helping them design and develop a complete waterless cooling solution, which includes large chillers and all the infrastructure that entails. Today, we are no longer talking about just data centers, but about "AI factories," large giant data centers that will provide a high-volume service, and local processing stations that will be placed in the heart of cities and near population centers that will help process data for end devices, just as telephone exchanges were placed near homes in the past."
Until now data center owners cooled the servers in their facilities with giant fans that made staying in the facilities uncomfortable and extremely noisy, and provides an unpleasant work experience that also consumes a lot of electricity. Others, such as Nvidia, for example, cool their data centers with water circulation.
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SoftBank teams with Israeli chip liquid cooling startup ZutaCore
ZutaCore’s technology is based on a liquid that is not water and does not conduct electricity, and is therefore safer for use in data centers, allowing them, on the one hand, to significantly cut ever-increasing power consumption due to the enormous processing volumes of AI applications, and on the other hand, to better utilize data center space and provide more processing power.
Published by Globes, Israel business news - en.globes.co.il - on June 2, 2026.
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