With increasing need for direct-to-chip liquid cooling due to AI GPU power consumption, demand for stainless steel valves and fittings has skyrocketed. As a result, early-stage relationships with equipment suppliers and trade partners have become mandatory for data centre development. Even companies traditionally focused on the food and beverage sector are seeing large orders from the tech industry, a surge that may threaten widespread shortages.
Why stainless steel?
The answer is AI. High-end ASICs and GPUs used in AI data centres are projected to exceed 4kW by 2029, and this is resulting in per-rack power demand exceeding 30kW. As we reach beyond this level, air-based cooling becomes insufficient. This has triggered a massive shift towards direct-to-chip and immersion cooling. Stainless steel provides material compatibility with fluid-based systems, thanks to its superior corrosion resistance, structural integrity under thermal cycling, and most importantly: mitigation of the risk of “plating out”.
When copper or brass used in traditional cooling loops reacts with dissolved oxygen or impurities in water, copper ions are formed. These ions flow downstream to less noble metals, most notably aluminum, causing a galvanic reaction where the copper "strips" electrons from the aluminum, causing the latter to dissolve into the fluid.
The cold plates used to cool modern GPUs rely on hundreds of copper micro-fins, often spaced only hundreds of microns apart. When copper ions regain electrons and convert back into solid copper, they bond to these fins and clog the channels. This leads to reduced cooling efficiency and thermal throttling. This is why material compatibility is a primary factor for system resiliency.
What are we seeing?
Procurement of stainless steel fluid system components is becoming more complex. DPR's Q1 2026 Market Conditions Report is now calling for data centres to engage in early collaboration with the steel industry, as part of data centre creation engagements, and emphasizes the importance of strategic relationships with manufacturers and trade partners. Turner & Townsend surveys show that 83% of respondents believe that their local supply chains are not prepared for the increased adoption of these kinds of cooling techniques.
To add fuel to the fire, Section 232 tariffs on steel imports have increased by 50% under the current trade policy, resulting in a significant reduction in imports while only creating a modest 2.2% increase in domestic production.
What does this mean for the industry?
With capacity already stretched thin, more firms are reaching out to unconventional sources for stainless steel pipes and fittings. At CPE Systems, we are seeing a massive influx of demand from the data centre sector. These orders are arriving in waves and are often significantly larger than the standard orders we see from the food and beverage industry.
With global production limited, we anticipate a potential reduction in the availability of these critical parts in the near future. We encourage our long-term customers to reach out as soon as possible so that we can secure capacity for your upcoming projects.