Silicon Valley-based chip cooling startup Frore Systems Inc. has just pulled in $143 million in funding through a late-stage round, bringing its total valuation to $1.64 billion.

The Series D round comes at a time when the data center industry is experiencing tremendous growth as enterprises and hyperscalers race to grow their infrastructure stacks to support artificial intelligence workloads. AI chips are known for quickly becoming too hot to handle, for they generate extreme heat, which makes them less efficient and erodes their compute performance. Cooling chips has become a major concern, and Frore has developed an extremely clever solution that can be used in almost any kind of device.

Founded about eight years ago by former Qualcomm Inc. engineers Sesh Madhavapeddy and Surya Ganti, Frore was initially focused on developing cooling technology for small devices such as smartphones and tablets, which lack the traditional fans used in laptops and data center servers. But with the rapid growth of AI computing, Frore has stumbled onto a much bigger opportunity for its advanced cooling technology.

The company realized this about two years ago when its founders were contacted by Nvidia Corp. Chief Executive Jensen Huang, who had just seen a demo of the tech, Bloomberg reported. Huang told them that they ought to expand their liquid-cooling solution to support not only small devices, but also chips such as graphics processing units. The founders immediately set about doing so, creating a series of products that work with Nvidia chips and boards, as well as those sold by other chipmakers, like Qualcomm and Advanced Micro Devices Inc.

Data center hardware is now Frore’s biggest opportunity. Its newest product, the LiquidJet Nexus tray, circulates a special coolant liquid through specially designed channels that flow around the processors in data center racks, removing heat from them more efficiently. Madhavapeddy said cooling has become the single greatest limitation in AI chip performance. “Traditional thermal technologies cannot keep pace with the AI revolution,” he insisted. “Frore’s advanced cooling platforms remove that barrier.”

Unlike classic liquid cooling systems that rely on flat “cold plates,” Frore’s technology is based on more flexible, three-dimensional channels that are customized for different types of chips. This approach enables the liquid coolant to flow through the system multiple times and dissipate more heat from the chips than standard systems.

The startup also uses materials that are lighter and thinner than those used in traditional data center cooling systems, which means that more units can be stacked inside each server. As a result, it enables AI-focused data center server racks to run much cooler, reducing their electricity use and increasing their performance. By avoiding the use of fans, it also helps to keep servers free of dust.

Andre de Baubigny of MVP Ventures said AI infrastructure is being built out at such enormous scales that it’s putting huge demands on other elements of data centers, with thermal architecture coming under the most stress. “Frore has built a breakthrough platform that unlocks higher compute density and efficiency across both hyperscale data centers and edge environments,” he said. “We believe thermal innovation will be a foundational layer of the AI infrastructure buildout.”

Today’s round was led by MVP Ventures and saw participation from a host of other backers, including Fidelity Management & Research, Top Tier, Mayfield Fund and Qualcomm Ventures.

Frore said it will use the capital from today’s round to expand its manufacturing capacity and build more of its cooling systems to meet rising demand for the technology. It currently manufactures its products exclusively in Taiwan, but wants to expand to additional locations.

Its customers include large cloud infrastructure providers, large enterprises building their own data centers and governments developing national computing networks, though it declined to name any.

Image: Frore Systems