BP's lubricants subsidiary Castrol is entering the data center cooling market as artificial intelligence workloads strain traditional air-based systems. Speaking at Computex 2025, CEO Michelle Jou outlined the company's expansion into liquid cooling technologies ahead of an anticipated surge in power densities to 150 kilowatts by 2027.
Bold pivot from automotive roots
The move represents a strategic pivot for the century-old lubricants company as its core automotive market faces headwinds from electric vehicle adoption. Castrol has commissioned research suggesting widespread industry dissatisfaction with current cooling methods, though the findings align closely with the company's commercial interests.
A Castrol-funded survey of over 600 data center professionals found that 74% expect air cooling systems to struggle with future demands, while 92% are considering liquid cooling adoption by 2030. However, the research methodology and respondent selection criteria were not disclosed, raising questions about potential bias and the generalizability of the findings.
Market opportunity amid fierce competition
According to Omdia, data center cooling is projected to be a US$16.8 billion market by 2028, as AI and cloud computing drive up heat loads and operational complexity. Castrol faces competition from established players such as GRC (Green Revolution Cooling), Submer, ZutaCore, and Iceotope, which have deeper experience in data center environments. Industry analysts note that while immersion and direct-to-chip cooling offer significant efficiency gains, liquid cooling adoption remains in the single digits, with air cooling still dominant.
Technical hurdles slow liquid cooling adoption
Traditional air cooling faces genuine limitations as AI applications generate unprecedented heat in server racks. However, liquid cooling adoption has been slow due to higher upfront costs, complexity, and concerns about potential equipment damage from leaks. Maintenance requirements are more specialized, and the risk of fluid leaks, while mitigated by design, remains a concern for operators prioritizing uptime. The transition from automotive service models to data center environments also presents cultural and operational challenges, as data center uptime and technical requirements are far more stringent.
Sustainability claims await verification
Sustainability is another key driver. Industry sources suggest immersion cooling can reduce energy and water consumption in data centers, addressing regulatory pressures for greater efficiency and lower carbon emissions. However, independent verification of the environmental impact of Castrol's hydrocarbon-based fluids, compared to water or synthetic alternatives, is not yet available.
Credit: Castrol
Taiwan partnerships face infrastructure constraints
Castrol's Taiwan strategy includes partnerships with local server manufacturers. Taiwan's dominance in semiconductors and server manufacturing presents a significant market opportunity, but the island's power infrastructure constraints could limit data center expansion regardless of cooling technology. This regional challenge may affect the pace of adoption and the scale of Castrol's opportunity.
Castrol's data center venture could provide revenue diversification as its traditional markets face long-term pressure from energy transition trends affecting parent company BP. However, whether it can establish meaningful market share against incumbents while navigating the technical and commercial complexities of enterprise computing remains an open question.
Castrol's entry into the data center cooling market highlights both the urgency and complexity of thermal management in the AI era. The company's global presence and technical pedigree offer advantages, but success will depend on overcoming operational, technical, and market barriers that have historically limited liquid cooling adoption. As the industry awaits independent validation and broader end-user adoption, Castrol's bold pivot will be closely watched as a bellwether for how legacy industrial players can adapt to the digital infrastructure boom.
Article edited by Jerry Chen
