Cooling, Water and Data-Centre Construction Supply Chain — 2026-09-05
Vertiv and Schneider Electric face diverging stock valuations despite record backlogs, as the U.S. grapples with a severe shortage of skilled electrical labor that is stalling AI data center construction. Meanwhile, political pressure on water usage intensifies, with House lawmakers introducing measures to prevent data centers from shifting water costs to ratepayers, and California advancing transparency bills.
Cooling, Water and Data-Centre Construction Supply Chain — 2026-09-05
Top developments
Skilled Labor Shortage Becomes Primary Bottleneck for AI Halls
The primary constraint on AI data center construction has shifted from equipment availability to workforce capacity. A new report highlights an acute shortage of skilled workers, with some electricians commanding annual earnings of $300,000 due to extreme overtime demands. This labor wall threatens to delay the completion of high-density racks requiring liquid cooling installations, impacting delivery schedules for Vertiv and Schneider Electric partners who rely on specialized on-site integration.
House Lawmakers Target Data Center Water Subsidies
On September 4, House lawmakers from both parties signaled agreement on preventing data centers from passing their significant water usage costs to ordinary ratepayers. While specific legislative mechanics are still being debated, this bipartisan push marks a shift in regulatory sentiment, potentially forcing hyperscalers to secure independent water sources or invest in closed-loop cooling systems earlier in the design phase to avoid future tariff penalties.
Vertiv vs. Schneider: Diverging Valuations Amid Record Backlogs
Despite both companies reporting record backlogs exceeding $15 billion for Vertiv and strong order growth for Schneider, market analysts argue only one deserves current premium valuations. Vertiv’s $15 billion backlog provides revenue visibility into 2027, but its pure-play exposure to liquid cooling makes it more sensitive to construction delays caused by labor shortages. Schneider’s diversified industrial base offers a hedge, but Vertiv remains the preferred vehicle for direct AI cooling exposure if execution risks are managed.
China’s Liquid Cooling Orders Booked Through Year-End
Chinese media reports indicate that domestic liquid cooling manufacturers have booked orders through the end of 2026, driven by the deployment of high-power AI clusters that exceed air-cooling capabilities. The market size for liquid cooling data centers in China reached 15.98 billion yuan in 2025, with expectations for the global smart computing liquid cooling market to surpass 100 billion yuan in 2026. This surge benefits local vendors like Envicool and Shenling Environment, creating competitive pressure on Western suppliers in the APAC region.
Local view
California: Two new bills headed to Governor Newsom’s desk aim to mandate transparency in data center water usage, following his previous veto of similar measures. Lawmakers argue that the lack of public data obscures the true environmental impact of AI infrastructure, particularly as drought conditions persist.
Colorado: Residents in Denver are expressing outrage over a data center watering its lawn during active drought restrictions. The incident has sparked legal questions about whether the facility is using recycled water or violating municipal codes, highlighting the growing community friction over water allocation.
Context & numbers
- Labor Earnings: Skilled electricians working on AI data centers are reportedly earning up to $300,000 annually due to overtime and premium pay structures.
- Backlog Visibility: Vertiv Holdings reports a backlog of approximately $15 billion, providing revenue visibility out to 2027.
- China Market Size: The Chinese liquid cooling data center market was valued at 15.98 billion yuan in 2025.
- Construction Growth: Data center construction activity in the U.S. is up 46% year-over-year, serving as the primary driver for nonresidential building growth.
On the radar
- California Water Bills: Watch for Governor Newsom’s decision on the two pending water transparency bills, which could set a precedent for national disclosure requirements.
- Labor Union Pressure: As construction volumes rise, unions are leveraging their position to demand better terms, which may impact contractor bids for major hyperscale projects.
- Q3 Earnings Season: Upcoming earnings from Vertiv, Eaton, and Modine will provide updated guidance on lead times for transformers and switchgear, key components for liquid cooling power distribution.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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