Every watt of electricity that enters a data center eventually becomes heat. Every single watt. The servers convert electrical energy into computational work and thermal energy, and the thermal energy has to go somewhere. In traditional data centers, it goes into the atmosphere — expelled by cooling towers, CRAC units, and exhaust fans into the sky, where it dissipates uselessly.
This is, by any rational measure, an extraordinary waste. The global data center industry consumed an estimated 460 TWh of electricity in 2025. All of that energy ultimately became heat. And almost all of that heat was thrown away.
At AI Green Bytes, we've built our infrastructure around a different premise: waste heat isn't waste. It's a product.
The Immersion Cooling Advantage for Heat Recovery
Here's where the physics of immersion cooling creates an opportunity that air cooling fundamentally cannot match. In an air-cooled data center, the waste heat is dispersed into a large volume of air at relatively low temperatures — typically 35 to 45°C at the exhaust. Extracting useful energy from low-grade heat at these temperatures is thermodynamically difficult and economically marginal.
Immersion cooling changes the equation entirely. The dielectric fluid absorbs heat directly from the components and can be circulated through heat exchangers at temperatures of 50 to 60°C — and with some system designs, even higher. This is medium-grade heat that's immediately useful for a wide range of applications.
The difference matters enormously. At 35°C, your heat recovery options are limited to pre-heating applications. At 55°C, you can feed directly into district heating networks, greenhouse heating systems, aquaculture facilities, and industrial drying processes. The temperature of the recovered heat determines its economic value, and immersion cooling delivers heat at temperatures that actually matter.
District Heating: The Nordic Model
In Iceland, Norway, and Sweden, district heating networks are already a core part of urban infrastructure. These systems distribute hot water from central sources — traditionally geothermal wells, waste incineration plants, or combined heat and power stations — to homes and businesses through insulated underground pipes.
Data center waste heat slots naturally into these networks. A 10 MW data center produces roughly 10 MW of thermal energy — enough to heat approximately 2,500 to 3,000 homes, depending on climate and insulation standards. In Nordic countries where heating demand is high for much of the year, this represents a significant and reliable heat source.
We're designing our Nordic facilities with district heating integration from the ground up. The immersion cooling loop connects to heat exchangers that feed directly into the local heating network. The data center gets cooled, the community gets heated, and the overall energy efficiency of the system approaches levels that would be impossible with either application alone.
The economics are compelling. Heat recovery can offset 10 to 15% of a data center's operating costs through heat sales, while simultaneously reducing the cooling energy required. For the district heating operator, data center waste heat is cheaper and more predictable than many alternative sources.
Agriculture and Aquaculture
Beyond district heating, there are applications that are particularly relevant to Iceland's economy. Greenhouse agriculture in Iceland has traditionally relied on geothermal heating to grow vegetables, herbs, and even bananas (yes, Iceland grows bananas) in a climate where outdoor agriculture is limited.
Data center waste heat can supplement or replace geothermal heating for greenhouses, extending growing seasons and enabling year-round production. The temperature range from immersion-cooled facilities — 45 to 60°C — is ideal for greenhouse heating systems.
Aquaculture is another natural fit. Iceland's salmon farming industry requires precise temperature control of water in land-based facilities. Waste heat from data centers can maintain optimal water temperatures, reducing the energy costs that represent a significant portion of aquaculture operating expenses.
We're actively exploring partnerships with agricultural and aquaculture operations near our planned facilities. The vision is a circular economy where data processing, food production, and energy systems are integrated rather than isolated.
The Carbon Accounting Advantage
Heat recovery doesn't just save money — it fundamentally changes the carbon footprint calculation of a data center. When waste heat displaces fossil fuel heating (as it does in many European district heating systems that still rely partly on natural gas), every kilowatt-hour of recovered heat represents avoided carbon emissions.
For a 10 MW data center recovering 80% of its waste heat, the avoided emissions can be substantial — potentially offsetting the facility's entire Scope 2 emissions and then some. This creates a scenario where a data center can be genuinely carbon-negative on a net basis: the emissions avoided through heat recovery exceed the emissions associated with the electricity consumed.
As carbon pricing mechanisms tighten across Europe and corporate ESG reporting requirements become more stringent, this accounting advantage becomes a real competitive differentiator. Customers choosing between GPU providers increasingly factor sustainability into their decisions, and a carbon-negative data center is a powerful story to tell.
From Waste to Value Chain
The data center industry has spent decades treating heat as a problem to be solved — an unavoidable byproduct to be expelled as cheaply as possible. Immersion cooling, combined with thoughtful facility design and local partnerships, transforms heat from a cost center into a revenue stream.
This is the kind of systems thinking that excites me most about what we're building at AI Green Bytes. It's not enough to build efficient data centers. We need to build data centers that are integrated into their communities and economies — facilities where the waste from one process becomes the input for another.
The technology exists. The economics work. The environmental case is overwhelming. The only question is how quickly the industry will move from throwing heat away to putting it to work.
