Supermicro ships 4,000 liquid-cooled AI racks, cuts energy costs 40%

Supermicro, a San Jose-based server manufacturer, is aggressively expanding its global operations to capitalize on surging demand for AI infrastructure, positioning itself as a key supplier in the race to build the computing backbone that powers artificial intelligence applications.

The company has experienced substantial growth over the past two years as organizations worldwide scramble to deploy high-performance GPU systems—specialized computers designed to handle the intensive mathematical calculations required for AI training and inference. These systems teach AI models to recognize patterns and then apply that learning to make predictions or generate content.

Speaking at the RAISE Summit 2025, Supermicro CEO Charles Liang outlined the company’s strategic response to what he believes is a multi-year boom in AI infrastructure spending. “I personally believe this AI boom trend will continue for many years to come,” Liang said during the conference.

Global expansion accelerates beyond US origins

While initial AI infrastructure demand concentrated in the United States, Liang noted that adoption is rapidly spreading to international markets, particularly the Middle East and Europe. This geographic expansion is driving Supermicro to scale its international operations significantly.

“Everyone see that demand grow to Middle East, grow to Europe very strong and very fast now,” Liang explained.

To meet this international demand, Supermicro is establishing local assembly facilities, service support centers, and logistics capabilities across Europe. This regional approach allows the company to reduce shipping costs, improve delivery times, and provide localized technical support for complex AI deployments.

The company’s competitive advantage lies in its modular “building block” design philosophy and vertically integrated manufacturing model. Rather than relying heavily on external suppliers, Supermicro controls more of its production process internally, allowing for faster customization and quicker response to specific customer requirements across different workloads and applications.

Navigating intensifying competition and pricing pressure

However, this rapid market growth is attracting numerous competitors, creating downward pressure on pricing. As more companies enter the AI server market and order volumes surge, traditional profit margins face compression.

“When the volume is huge, when there are lots of competition, for sure, they always have a cost of price pressure,” Liang acknowledged.

Rather than viewing this as purely negative, Liang argues that increased competition accelerates innovation across the industry. “The more competition, [makes] the industry grow even faster, even better,” he said.

Liquid cooling technology emerges as key differentiator

One area where Supermicro is working to maintain competitive advantage is liquid cooling technology—a critical capability for modern AI systems that generate enormous amounts of heat. Unlike traditional air-cooled servers, liquid cooling systems circulate coolant directly through server components, dramatically improving heat dissipation efficiency.

This technology has become increasingly necessary as AI processors become more powerful and generate more heat in densely packed data center environments. In 2024 alone, Supermicro shipped 4,000 racks equipped with direct liquid cooling systems.

According to customer feedback, these liquid-cooled systems can reduce data center energy consumption by 30% to 40% compared to traditional air cooling methods. “We work together to save them up to 30%, or some customer even save up to 40% of energy power,” Liang said.

This energy efficiency translates into significant cost savings for data center operators, who face mounting electricity bills as AI workloads consume increasing amounts of power. Supermicro invested three years in refining its liquid cooling technology to improve reliability and simplify deployment for customers.

AI tools reshape internal operations

Supermicro is also applying AI technology to its own business operations, particularly in hardware design and firmware development. The company now uses AI assistance for nearly 40% of its software and firmware development work, allowing development teams to accelerate product cycles without expanding headcount.

“Today, up to 40% of our firmware, software, are designed by AI,” Liang said. This internal adoption demonstrates how AI tools are reshaping traditional engineering processes, enabling faster iteration and testing of new hardware configurations.

Evolution toward comprehensive data center solutions

Looking ahead, Supermicro plans to expand beyond its traditional role as a hardware supplier to offer integrated AI data center solutions. This strategic shift responds to customer demand from hyperscalers—massive cloud computing companies like Amazon Web Services, Microsoft Azure, and Google Cloud—as well as large enterprises seeking faster deployment of complete AI systems.

“We start to extend our business scope to data center, infrastructure, total solution,” Liang explained. Rather than purchasing individual components and integrating them separately, customers increasingly want turnkey solutions that include hardware, software, cooling systems, and ongoing support services.

This comprehensive approach could help Supermicro capture more value from each customer relationship while reducing the complexity customers face when building AI infrastructure from multiple vendors.

Market outlook amid uncertainty

While geopolitical tensions and economic uncertainty could potentially slow AI infrastructure spending in the short term, Liang remains optimistic about the technology’s central role in global competitiveness. Companies and countries increasingly view AI capabilities as essential for maintaining economic and strategic advantages.

The combination of international expansion, advanced cooling technology, and comprehensive solution offerings positions Supermicro to benefit from continued AI infrastructure growth, even as competition intensifies and profit margins face pressure. For the company, success will likely depend on maintaining technological leadership while scaling operations efficiently across diverse global markets.