LG Signs Agreement to Cool 5 GW AI Data Center Capacity

LG announced a multi-year agreement with Air Control Concepts, based in Norfolk, Virginia, USA, to supply cooling units and cooling solutions for over 5 gigawatts of AI data center capacity in the United States and Canada, according to the Korea Herald.

The company did not disclose the financial value of the deal or the delivery schedule, meaning that the expected revenue size and implementation dates remain unannounced for now, which is common in long-term agreements before final orders are confirmed.

LG stated that its orders in the AI data center cooling sector exceeded 600 billion won in the first half of the year, and that it expects to reach its annual revenue target of 1 trillion won in cooling units ahead of the original schedule set for the end of 2027, earlier than the timeline it previously targeted.

The agreement highlights the growing pressure on supply chains serving data center expansion, as cooling represents one of the biggest operational challenges in running AI-dedicated chip clusters, because these chips generate high heat requiring continuous cooling systems. Cooling systems are a fundamental part of operating costs for any data center, as failure could lead to chip outages. This is a sector attracting rising Gulf investments in the Arab region.

What do these terms mean?

Gigawatt: A unit of electrical power measurement, where one gigawatt equals one million kilowatts. Cooling units: Devices that maintain the temperature of chips inside data centers to prevent overheating. Korean Won: The official currency of South Korea. Supply chain: The network of companies through which components move from the factory to the final product.