Japan's largest vending machine maker, Fuji Electric, is leveraging its refrigeration expertise to build an energy-saving cooling system for power-hungry artificial intelligence data centers, claiming it can cut energy consumption by 85%.

The technology was originally designed to chill carbonated drinks, tea, and coffee, marking the latest move by a Japanese industrial group to reinvent itself as a key supplier of AI infrastructure components.

Fuji Electric produces 80% of Japan's vending machines.

The company has redesigned the cooling technology originally used in vending machines to launch a data center cooling system.

Cooling servers accounts for 30% to 40% of data center energy consumption, presenting a massive opportunity for Japanese companies skilled in air conditioning and refrigeration.

Fuji Electric joins a wave of Japanese industrial groups including Panasonic, Mitsubishi Electric, and Sumitomo Electric that are repositioning themselves as key suppliers of AI infrastructure components.

Fuji Electric's technology traces back to efforts to improve vending machine energy efficiency after the 2011 Fukushima nuclear accident.

At the time, vending machines became a symbol of wasted energy, and then-Tokyo Governor Shintaro Ishihara called for a blanket shutdown of vending machines to save power.

That call prompted Fuji Electric and Toyota supplier Denso to develop a new cooling system.

In 2015, a research team developed an ejector using carbon dioxide refrigerant that eliminates the need for a compressor, cutting energy use by 20%.

Hideto Shirai, who is in charge of marketing the technology to data centers at Fuji Electric, said: "Simply extending existing technology is not enough."

Most cooling systems use compressors, consuming large amounts of electricity to convert refrigerant into high-temperature, high-pressure gas.

Fuji Electric's ejector uses waste heat to drive refrigerant through a precision-engineered nozzle, raising pressure through fluid motion.

However, the technology was never adopted in vending machines because installation costs were too high, given that a vending machine itself is worth only a few thousand dollars.

Shirai said: "We knew the technology worked."

"But it was difficult to make it bear fruit in vending machines. Then the idea began to take shape: what if we applied it to another industrial field?"

The Tokyo-based electrical equipment supplier plans to sell more than 10 billion yen (about $61 million) worth of ejector systems to data centers by 2030.

The company already sells 100 billion yen annually in data center-related components such as switchgear.

Its role as a supplier of "picks and shovels" for AI, along with improving profit margins in its energy components business, has driven Fuji Electric's stock up nearly 47% over the past year, giving the company a valuation of $13.9 billion.

Alex Cordovil, research director at data infrastructure research firm Dell'Oro, called the technology "promising" but still "truly at an emerging stage."

The data center cooling market is shifting from traditional systems using water and glycol or hydrofluoroolefin refrigerants to direct liquid cooling, which circulates liquid coolant directly to heat-generating components such as CPUs and GPUs.

Fuji Electric's system can be used in direct liquid cooling systems.

The ejector technology performs better in parts of Japan where summer temperatures often exceed 35 degrees Celsius, as well as in hot regions like Southeast Asia.

But Cordovil said competing technologies that harness waste heat — absorption chillers made by Kawasaki, Ebara, and Yazaki in Japan — have advantages over Fuji's system for data center applications.

Goldman Sachs analyst Ryo Harada expressed doubts about whether Fuji Electric can enter the large US data center market.

He said: "The technology may be compelling, but commercialization matters just as much."

"Hyperscalers have largely locked in their next-generation data center architectures for the next two to three years, so new entrants may need at least as long to make meaningful progress."