Wafr Technologies, a Vancouver-based startup founded in 2025, has raised $100 million from private investors to commercialize its proprietary cooling technology designed to dramatically cut water and energy use at artificial intelligence data centers. The company announced the funding as part of a broader $300 million fundraising campaign, with plans to secure an additional $200 million from government sources and private backers as soon as possible.
The startup's core innovation is a thermal battery system that captures and stores cooling capacity when grid electricity is inexpensive, then releases it during peak demand periods. According to the company, the technology can reduce water consumption by up to 95 percent and cooling power use by up to 80 percent compared to conventional evaporative cooling systems. A single 100-megawatt AI data center in the United States currently consumes roughly two million liters of water daily, equivalent to the water use of approximately 6,500 households.
Cooling has emerged as one of the most critical infrastructure bottlenecks in the global AI race. Traditional data centers allocate 30 to 45 percent of their total electricity load to cooling alone, and the rapid expansion of AI workloads is intensifying that burden. Google's 2026 Environmental Report revealed that the company's electricity demand surged 37 percent during 2025, the largest annual increase in its history, driven primarily by AI infrastructure expansion.
Wafr plans to deploy the newly raised capital toward launching an AI research lab, establishing a new data center facility in Canada, and hiring dozens of technical staff across the country in the coming months. The company has also signed letters of intent with international partners involved in constructing AI data centers, targeting the United States and European markets including Germany as primary expansion zones.
The funding comes at a time when the AI industry is grappling with the environmental consequences of its rapid growth. Conventional data center cooling systems rely heavily on evaporative processes that consume vast quantities of freshwater, placing strain on local water supplies in regions already facing scarcity. Wafr's approach addresses both the water and energy dimensions of the problem, offering a solution that could help data center operators meet sustainability targets while managing rising heat densities from next-generation AI chips.
Industry analysts note that the data center cooling market is poised for significant growth as global AI infrastructure investment accelerates. The race to build sufficient computing capacity for large language models, image generation, and other AI applications has created enormous demand for cooling solutions that can handle power densities far exceeding those of traditional cloud computing workloads. Wafr's thermal battery technology represents one of several emerging approaches, alongside liquid cooling and immersion cooling systems, competing to become the standard for next-generation AI facilities.
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