SoftBank teams with Israeli chip liquid cooling startup ZutaCore

In the world of technology, Erez Freibach and Nazhon Edleson are polar opposites. For most of his career, Freibach worked as an executive official for Israeli companies, and lives between Silicon Valley and Israel. He was a financial manager at Indigo before selling it to HP for $ 830 million, and held high positions in large telecom companies such as 3Coms and the Israeli company Atrica. For his part, Eadelson does not get a university degree – barely completed high school – but its record extends to companies and innovations in everything from algae cultivation to cooling systems for electric car batteries. The two met for the first time in the incubator of the MERAGE ISRAEL Foundation in Negev, which was founded by David and Laura Merge, where he served Freibach as a guide, which included Eadelson’s directive.

“After this chapter is over, each of us went our separate way until they came to me with a list of 20 ideas,” Freibach remembers. “Then we started working on a soldier for soldiers, somewhat of a uniform with a thread battery in a bag, but after a few months I told him that I did not know anything about fashion. After that, we moved to the cooling systems of computers. From that point, I also wanted to solve the excessive servers problem.”

Therefore, nine years ago, the two founded Zutacore. Both have strong relations with the Gaza border area – Freibach was raised on Kibbutz Nahal Oz and Adson living on Sdei Avramam and made a decision to locate their company in Sderot. Then they persuaded Intel, NVIDIA and Softbank that the system they developed could make a big difference when building Amnesty International factories, and wide -scale data centers that serve giants such as Openai, Google and Microsoft. The liquid cooling solution without water that technology giants designed to overcome one of the most painful and less famous problems in this field: high temperature of the central processing units – the same chips that lead the artificial intelligence revolution.

When they founded Zutacore nine years ago, the two chose the bet on Intel, then a growing company dominates the Chip Global Chip Pref Era. “We tried to persuade physicists in Intel and other companies that our solution succeeded, but everyone told us that it contradicted the laws of physics, and even saw the regime with their own eyes, they did not believe it,” says Fibbash.

However, a picture from within their laboratory persuaded the Intel cooling department to fly to Israel and see the invention for itself. “We were sitting in one of the updated office rooms at Sderot Bus Company. We put Intel’s executive in front of the system, and we showed him how he stood up in front of different amounts of pressure and volatile temperatures. He was shocked. He was shocked.

Now, in this exclusive “Globes” interview, Zotakor A new partnership is announced: The cooling system was chosen by SoftBank as a major supplier of the AI’s refrigeration systems. Softbank, along with Openai, Tesla and Oracle, will lead the Stargate project that President Trump started upon entering the White House, with the intention of transferring the largest part of the power to address artificial intelligence to the United States from the Gulf states. Using the refrigeration system in Zutacore, SoftBank servers will be able to absorb more processors and perform a much larger size of accounts, to satisfy America’s hunger for artificial intelligence.

Softbank has seen some bad reputation about many scandals, such as its 300 million dollar investments in the WeWork Numan, which decreased the exchange, along with the losses that were exposed during 2022-2023. However, since these crises, the Japanese giant is trying to improve its image through large deals in one of the fastest growing sectors: artificial intelligence processing. For example, she invested $ 40 billion in Openai with a rate of $ 300 billion, a floating arm, the chips that you own, whose technology was also included in NVIDIA graphics units. “Softbank has announced that hundreds of billions of dollars in the server sector have been invested and we chose to cool down,” says Freibach.

Unexpected revolution

The launch of Chatgpt brought with an unexpected revolution in the way in which millions of data reach and create content. But unlike the simple Google search, artificial intelligence processing requires an unusual computing power that makes its operation much more expensive. This is one of the reasons that make services such as ChatGPT, Sora and Claude requires large monthly payments, however, continuing cash bleeding without stopping.

The bottleneck to growth is not only the production share in NVIDIA graphics processing units – each cost between 30,000 dollars and $ 50,000 – but also the need for new data centers, equipped with server shelves that are included for the chips. To date, one of the factors that has made the creation of these databases is expensive – although reduce it by the Cloud and Chip giants – is the need for more powerful cooling systems.

AI chips can reach temperatures ranging from 50 and 60 ° C, and can rise up, up to 100 ° C when fixed together in the same server shelf. To date, the main cooling method was to install giant fans, making these facilities very cold and loud; An unpleasant work environment also consumes large amounts of electricity. In these facilities, which are currently most of the costs of cooling databases, represent up to 40 % of electricity consumption. According to the study of Goldman Sachs, data centers consume 3 % of the US electricity consumption. By 2030, this number is expected to grow to 8 % of total consumption, which is a slightly higher number of electricity consumption in the entire California.

In recent years, NVIDIA and its manufacturers have realized from the server – companies like Dell, SuperMicro and Foxconn – that air cooling was not an effective enough ventilation system. They have found a familiar solution in the industry: water or liquid cooling, and it is now the main cooling method for the new generation of Blackweell processors in NVIDIA. The market is increasingly the benefits of liquid cooling. For example, SuperMicro, one of the NVIDIA server manufacturers, stated that liquid cooling will be used in 20 % of his server cabinets by 2025, adding that this will be able to reduce energy consumption by 30 % to 40 %. NVIDIA reported that liquid cooling will enable it to double the power of the computer when it was possible with air cooling.

But the water cooling also has its flaws: it spoils the tubes, requires high maintenance, and most importantly, it can leak and cause short circles. In fact, only one drop of water can cause severe damage to the large server that costs millions of dollars. Foxconn shared last July after its servers, based on Blackweell chips, were damaged due to water leakage. In addition, the expensive water cooling systems, about 15 to 20 times the cost of the air -based cooling system used in the old H100 chips in NVIDIA. The states such as California, Nevada and Texas suffer from a severe water shortage that raises the price of water cooling, and therefore the market is looking for a more suitable alternative to the environment. However, the Morgan Stanley expects that the liquid cooling system market will double to $ 4.8 billion by 2027.

“Other companies have collapsed”

This is what brought the CEO of Softbank Masayoshi to Sdeot. Zutacore belongs to a new wave of companies that use an artificial liquid that does not electricly, so that even if it leaks, the server will not be operated. But Zutacore technology makes it a unique player, even among its competitors: the liquid boils at a relatively low temperature of 34 degrees Celsius; Boiling work absorbs the chip heat. According to Zutacore, this allows the lowest cost of cooling chip available today: 0.03 cents per kilowatt.

“Factory managers of artificial intelligence today are facing difficulty in cooling NVIDIA, Intel or AMD chips,” says Figbash. “The current solutions will not be insufficient within two years. If you ask the CEO of Nvidia Jensen Huang, who makes phones, he will be called Apple. If I ask him about cooling the stage, he will call Zutacore.”

In this case, “changing the phase”, or “two stages” in the language of industry, is the change in the case when the fluid becomes gas. The company’s technology depends on a mechanism for regulating pressure and boiling microbia. For example, take the pasta bowl and boil the water in it. In order for this to happen, the bottom of the bowl needs to heat at least 108 ° C. Freibach notes that this analogy to achieve the technological zutacore is that the company has achieved boiling water in the pasta bowl at 101 ° C. Zutacore claims to be supported by 24 relevant patents.

Do not attract water, and the fact that the cooling process is this heat from the chips environment, some of the world’s largest cooling companies to Zutacore. Recently, the American company has led an investment tour of $ 30 million, with the participation of the Israeli shipping company ZIM. Previously, Zutacore collected $ 40 million in investors such as Lip Ventures Boutique, Mitsubishi Heavy Industries, as well as private sector investors such as Marius Nacht, ITay Rosenfeld, Avinoam Nowogrodski and Yair Alster, according to the Research Center IVC.

Although the company is relatively early, it was only able to enjoy the fruits of its efforts. “Only a penny has fallen and suddenly companies recognize the existence of a different type of physics,” says Freibach. “For many years, we lived in HPC revenues (high -performance computing, and the very strong computers that you use mainly by academic institutions or army). Some of the seven -year -old liquid cooling companies realized and collapsed. Eighteen months ago, the industry realized that this story has ended and that every new tumor would need liquid cooling.”

“We didn’t get help.”

More than 100 employees come in Zutacore from Gaza border societies, SDerot, Beersheva and the surrounding areas. The company did not escape from the events of October 7. He says: “On Saturday, no one was in the office, but through security cameras, you can see the terrorists call RPG at the damaged building,” he says.

Freibach, who was in Mountain Vio, California on that day, immediately returned to Israel to take care of his employees. A third of the company was formulated in reserves. “On October 7, I celebrated the 60th birthday. I also found myself reviewing the list of the entire employees with our human resources manager, and asked the employees what they needed. Within a week, we organized an enlargement at the company level every morning, and within three weeks, we went back to work, and this is what we used to return.

Have you received government help?

“Our employees have given us a help package, and we got support from some of our investors as well, but the truth is that we did not get any help. We were encouraged … reassurance. We did not ask for donations, and therefore we did not receive anything.”

What about the ministries of finance and economy, the TKUMA Directorate (the government authority responsible for rehabilitating the Gaza border societies)?

“Why should they give me? My story revolves around success, not to survive. We haven’t received any benefits to this day, regardless of the tax benefit as a business in Sdeot.”

Softbank from Japan, a country that has been cold towards Israel since the war. How do they look at this (the situation) there?

“We are not dealing with that. Ultimately, the market wants our solution, and it is not interested in the war. I visited Japan once – they applauded us, and that was influential.

It was published by Globes, Israel Business News – En.globes.co.il – on April 18, 2025.

© Copy Publish Publisher Itonut (1983) Ltd. , 2025.