LG Electronics’ Data Center Cooling Strategy 2025: From HVAC to AI Infrastructure Dominance

LG Electronics’ Commercial Projects: Capturing the AI Data Center Cooling Market in 2025

LG Electronics has transformed its market position from a legacy HVAC manufacturer into a critical supplier for the AI infrastructure sector by securing large-scale commercial contracts for data center thermal management.

• Before 2025, LG’s activities were largely foundational, focusing on internal R&D and building out its AI capabilities, such as the EXAONE model, which laid the groundwork for AI-optimized systems.
• The year 2025 marks a decisive commercial shift, validated by a multi-billion dollar annual agreement to supply vertically integrated cooling solutions for Microsoft’s AI data centers, moving LG from a component provider to a full-service infrastructure partner.
• This commercial momentum is reinforced by securing its first major U.S. AI data center cooling contract in September 2025 and winning a project for a large-scale data center in Jakarta, Indonesia, in August 2025, demonstrating successful global market penetration.
• The company is also engaged in high-profile projects like providing thermal management for Saudi Arabia’s NEOM AI data centers, which require solutions optimized for extreme environmental conditions and high-density AI workloads.

Investment Analysis: How LG is Funding its AI Infrastructure Expansion

LG has committed significant capital to establish itself as a leader in AI data center solutions, with targeted investments in R&D, manufacturing, and technology access. The company’s financial strategy directly supports its pivot to high-growth B2B markets.

Table: LG Electronics’ Strategic Investments in AI Infrastructure and Technology

Partnership Strategy: LG’s Alliances for Data Center Cooling Technology in 2025

LG Electronics has built a network of strategic partnerships in 2025 to acquire specialized technologies and scale its data center cooling business globally. These collaborations are central to its strategy of offering comprehensive and advanced thermal management solutions.

Table: LG Electronics’ Key Partnerships for AI Data Center Solutions

Geographic Expansion: How LG Electronics is Capturing Global Data Center Markets

LG Electronics has rapidly expanded its geographic footprint for AI data center cooling solutions in 2025, moving from a domestic focus to securing major international projects in key growth markets.

• Between 2021 and 2024, LG’s focus was primarily on internal R&D and domestic projects in South Korea, such as the verification project with LG Uplus and the establishment of its new HVAC R&D hub in Changwon.
• In 2025, LG executed a significant global expansion, securing its first large-scale AI data center cooling contract in the United States in September 2025, marking a critical entry into the North American market.
• The company further solidified its international presence by winning a contract for a large AI data center in Jakarta, Indonesia, in August 2025, expanding its footprint in Asia.
• LG’s global reach is highlighted by its agreement to supply cooling infrastructure for Microsoft’s worldwide data centers and its talks to provide solutions for the high-profile NEOM project in Saudi Arabia.

Technology Maturity: LG Electronics’ Cooling Solutions Achieve Commercial Scale

LG’s AI data center cooling technology has matured from the research and development phase to full-scale commercial deployment, validated by major contracts and specialized infrastructure.

• In the period from 2021 to 2024, LG’s efforts were concentrated on foundational development, including building out its internal AI capabilities and existing HVAC expertise.
• The year 2025 demonstrated the technology’s commercial readiness with the establishment of the LG AI Data Center HVAC Solution Lab in July 2025, a dedicated testbed for validating solutions under real-world AI workloads.
• Commercial validation was achieved through the multi-billion dollar agreement with Microsoft, which requires delivering vertically integrated cooling solutions at a global scale.
• The company is also advancing its technology portfolio through partnerships focused on next-generation cooling, such as the MOU with SK Enmove and GRC for liquid immersion cooling, indicating a forward-looking approach beyond current air-cooling technologies.

Competitive Analysis: LG Electronics’ Market Position in AI Cooling 2025

Table: SWOT Analysis of LG Electronics’ AI Data Center Cooling Business

2026 Outlook: Execution of Microsoft Contract to Define LG’s Market Leadership

The successful execution and scaling of the multi-billion dollar Microsoft supply agreement will be the most critical factor in cementing LG Electronics’ position as a leader in the AI data center cooling market.

• The primary focus for investors and competitors will be monitoring the deployment and performance of LG’s cooling solutions across Microsoft’s global data center footprint, as this contract serves as the ultimate validation of its “One LG Solution” strategy.
• Progress in advanced cooling technologies, particularly the liquid immersion cooling solutions being developed with SK Enmove and GRC, should be watched as an indicator of LG’s ability to meet the future demands of even higher-density AI hardware.
• The revenue generated from these new B2B infrastructure projects will be a key metric for tracking LG’s progress toward its ambitious 2030 target of KRW 100 trillion in annual sales.
• Further contract announcements, especially in North America and Europe, will signal whether LG can convert its initial 2025 momentum into sustained market share gains against entrenched competitors.

Frequently Asked Questions

What is the most significant milestone in LG’s transition into the AI data center market in 2025?
The most significant milestone was the multi-billion dollar annual agreement signed in December 2025 to supply vertically integrated cooling solutions for Microsoft’s global AI data centers. This deal validated LG’s shift from a component supplier to a full-service infrastructure partner.

How is LG funding its aggressive expansion into AI data center solutions?
LG is funding its expansion through several strategic investments, including a 100 trillion won ($71 billion) R&D fund earmarked through 2028, a $35.9 million investment in a dedicated HVAC R&D center in South Korea, and a ₹1,000 crore (~$120 million) investment in a new R&D and manufacturing facility in India.

Is LG only focused on traditional air cooling, or is it exploring next-generation technologies?
LG is actively exploring next-generation technologies beyond traditional air cooling. In October 2025, the company signed an MOU with SK Enmove and GRC to specifically advance and commercialize liquid immersion cooling solutions to meet the demands of high-density AI hardware.

Besides the Microsoft deal, what other projects demonstrate LG’s global expansion in 2025?
In 2025, LG demonstrated its global reach by securing its first major U.S. AI data center cooling contract in September, winning a project for a large-scale data center in Jakarta, Indonesia, in August, and engaging in projects for Saudi Arabia’s NEOM AI data centers.

What is LG’s key competitive advantage against established players like Vertiv?
LG’s key advantage is its ability to offer a vertically integrated “One LG Solution,” leveraging its extensive experience in traditional HVAC manufacturing to provide everything from components to installation and services. Securing large-scale contracts like the one with Microsoft in 2025 has given it a significant first-mover advantage in the rapidly growing AI cooling market.