What if there were fewer AI data centers in the world?
A new analysis by Silicon Valley unicorn Frore Systems reveals that improved cooling technologies could enable AI data centers to generate up to 40% more tokens using the same amount of electricity, potentially easing pressure on local power grids and water supplies in communities hosting these facilities.
San Jose, California, October 13, 2026 /PRNewswire/ — The race to build AI data centers is hitting a hard constraint: insufficient available electricity. Frore Systems explains in its white paper, “Cooling Is the Next Revolution,” that one of the biggest solutions is closer than it seems. Research shows that by optimizing the thermal stack and running AI chips at lower temperatures, data centers can generate over 40% more AI output using the same amount of electricity. This means fewer new facilities may be needed to meet global demand for AI.
Every AI response, image, or line of code is composed of "tokens"—the fundamental units of intelligence produced and sold by AI systems. AI data centers, increasingly referred to as AI factories, exist solely to produce tokens. Their output is no longer limited solely by chips or funding, but increasingly by electricity. AI factories often face years-long waits for new utility connections, regulators are imposing limits on their power consumption, and communities are opposing the massive electricity and water usage of these facilities.
Frore Systems' paper shows that heat is quietly eroding the amount of useful work each watt of power can generate. As AI chip temperatures rise, more power leaks away as waste heat rather than being used for computation. This wasted power approximately doubles for every 10-degree Celsius increase in chip temperature. According to the paper’s analysis, reducing chip temperature by 10 degrees Celsius can yield approximately 15% more tokens per watt.
Seshu Madhavapeddy, Founder and CEO of Frore Systems, said: “The AI industry wants to build more data centers. We believe it should also ask how much more performance can be extracted from existing data centers. In a world constrained by electricity, not a single watt can be wasted. If cooling is viewed as a performance system rather than mere plumbing, the same buildings, the same chips, and the same available power can generate significantly more tokens.”
This paper traces the complete path of heat through the thermal management stack: from the silicon chip, to the package, to the thermal interface material bonding the chip to the cold plate, to the coolant, and finally to the cooling tower. Its key findings include:
- With the same power consumption, token output can increase by over 40%. A well-designed cooling system can boost token output per watt of electricity by over 40% in an AI factory. Since this additional output requires no increase in production costs, it directly translates into profit.
- Chips operating at lower temperatures have longer lifespans and fewer errors. Reducing the operating temperature of a chip from 95°C to 65°C can double the GPU's lifespan and reduce the risk of silent computational errors.
- Manufacturing cold plates has long been a bottleneck. Traditional cold plates are machined from solid copper blocks, limiting their design flexibility. Frore’s LiquidJet cold plate is manufactured using semiconductor fabrication processes, enabling 3D ultra-short-loop multistage structures tailored to the specific power distribution of each GPU—structures impossible to produce with conventional machining methods. Simply by using Frore Systems’ LiquidJet cold plate, token output per watt can be increased by 25%. Its latest version, LiquidJet Diamond, integrates diamond material to dissipate heat from extreme hotspots on the chip, delivering a further 35% improvement.
Its impact extends far beyond engineering. Applying a 40% improvement to the construction planning of hyperscale cloud providers could mean that the same production capacity, which previously required building 10 new AI data centers, can now be achieved with just 7. This translates to avoiding the construction of three multi-billion-dollar projects, eliminating three additional grid connection points in power-constrained regions, and relieving three communities of the electricity and water demands associated with a hyperscale facility.
Madhavapeddy added: "Thermal management stack design was previously viewed as just one item among facility costs. But in the context of the current large-scale construction of AI factories, it has become a strategic decision at the board level. It determines how many facilities a hyperscale cloud provider needs to build, how quickly AI capacity can be brought online, and how to respond to surrounding communities."
How to obtain
The Frore Systems white paper, "Cooling Is the Next Revolution," is available for free download at: https://www.froresystems.com/cooling-next-revolution
A配套14-part blog series will be released over the coming weeks, explaining the paper’s findings in accessible language at: https://www.froresystems.com/blog/tokens-the-currency-of-ai
About Frore Systems
Frore Systems is a pioneer in advanced thermal management technology, dedicated to unlocking the performance of data centers and edge devices. The company’s flagship solutions include: AirJet®, the world’s first solid-state active air-cooling chip, already deployed in consumer, industrial, and IoT markets to enable higher performance in ultra-compact, quiet, lightweight, dustproof, and waterproof edge devices; LiquidJet®, a 3D ultra-short-loop multi-stage liquid cold plate designed for data centers; LiquidJet® Diamond, which integrates a diamond diffusion layer to enhance GPU performance, AI token throughput, improve PUE, and reduce TCO; and LiquidJet® Nexus, a lightweight, integrated cold plate system that combines multiple LiquidJet units, eliminating all hoses, connectors, and manifolds to support 1/2U compute trays. Frore Systems’ patented cooling technologies are integrated into products by major OEMs and system manufacturers worldwide. Headquartered in Silicon Valley with manufacturing operations in Taiwan, Frore Systems is redefining thermal architecture for the AI era. For more information, visit www.froresystems.com.
Media contact (CEO interviews and more)
Sue Ryan - Frore Systems
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