Data Center Cooling Market Size & Share 2025 - 2034

Data Center Cooling Market Size

The global data center cooling market was estimated at USD 18.4 billion in 2024. The market is expected to grow from USD 20.8 billion in 2025 to USD 49.9 billion in 2034, at a CAGR of 10.2%, according to latest report published by Global Market Insights Inc.

The data center industry is shifting from traditional air-based cooling to liquid cooling technologies due to the increase in AI and HPC workloads. Direct-to-chip and immersion cooling systems now handle rack densities over 50 to 120 kW, which allows for efficient operation of the latest compute infrastructure.
 

Major global companies like Microsoft, Google, and Meta have started to roll out liquid cooling systems for their AI operations. This marks a transition from testing to full-scale implementation. This change is due to GPU heat loads increasing from 300W in 2017 to more than 1,200W with NVIDIA's Blackwell chips expected in 2024.
 

AI-driven optimization is changing how data centers manage heat efficiency. Google's DeepMind-controlled systems have achieved cooling energy reductions of up to 40%. This shows how predictive algorithms can improve performance while reducing operational costs. These smart solutions are becoming the norm in high-density data center operations.
 

The data center industry is shifting from traditional air-based cooling to liquid cooling technologies due to the increase in AI and HPC workloads. Edge sites operate in different environments and need flexible thermal management systems that can maintain reliable performance in small spaces and remote areas.
 

AI and ML workloads account for nearly 35% of overall market growth, while digital transformation projects add about 28%. Increased data generation, cloud adoption, and remote operations are pushing the need for efficient, sustainable, and scalable cooling infrastructure in data centers around the world.
 

Data Center Cooling Market Trends

The data center cooling industry is changing significantly as liquid cooling technologies become common. Rack power densities have nearly doubled from 5 kW to 8 to 10 kW. AI workloads now consume between 30 and 120 kW per rack. Traditional air-based systems can no longer meet this demand. As a result, many hyperscale and enterprise facilities are turning to liquid-based cooling systems.
 

Direct-to-chip liquid cooling is becoming the top choice for leading technology companies. NVIDIA now recommends liquid cooling for their GPU architecture. This method uses cold plates that can handle over 1,500 W per socket. This technology keeps temperatures steady for high-wattage CPUs and GPUs. It also lowers energy use and improves system reliability.
 

Immersion cooling, including single-phase and two-phase options, is becoming popular in high-density environments. Single-phase immersion involves putting servers in dielectric fluid for direct heat removal. Two-phase systems rely on vaporization for better efficiency. Companies like Submer, Green Revolution Cooling, and LiquidStack are leading large-scale deployments and partnerships from 2024 to 2025.
 

Artificial intelligence is changing how we optimize cooling by allowing for real-time and flexible management. Google’s DeepMind-based AI system achieved a 40% reduction in cooling energy use through predictive optimization. These systems examine data from thousands of sensors to adjust set points dynamically, carry out predictive maintenance, and maintain peak performance across complex cooling setups.
 

Environmental sustainability is also driving innovation in cooling systems, as data centers aim to cut down the 30 to 40% of energy used for cooling. Waste heat recovery, low-GWP refrigerants, and circular economy strategies are being widely adopted. Scandinavian markets are leading with policies that require heat reuse. These policies are setting a trend for global sustainability standards in next-generation cooling technologies.
 

Data Center Cooling Market Analysis

Based on component, the market is divided into solution & services. The solution segment accounting for around 66% share in 2024 and is expected to grow at a CAGR of over 10.4% through 2034.
 

• Growth in the solution segment is driven by the shift toward advanced liquid cooling systems, which demand significant upfront investment. These systems support high-density AI and HPC workloads, leading to a notable increase in infrastructure spending as operators deploy next-generation cooling systems with advanced heat management capabilities.
   
• High-capture-value technologies such as chip-board and immersion cooling systems are gaining traction, enhancing efficiency and reliability. Integrated with AI-driven optimization and smart sensors, these solutions eliminate manual adjustments and improve temperature consistency, marking a technological evolution in precision thermal management across hyperscale and enterprise facilities.
   
• The service segment, though smaller at 33% share or USD 3.3 billion in 2024, is becoming increasingly critical. It includes installation, maintenance, and system optimization services. The complexity of liquid and hybrid cooling architectures is driving demand for specialized support and third-party expertise.
   
• Emerging trends like cooling-as-a-service models are reshaping operational strategies, especially for smaller operators lacking in-house capabilities. As the installed base of advanced cooling systems grows, service requirements will intensify, positioning this segment for faster expansion and long-term recurring revenue opportunities.
   

Learn more about the key segments shaping this market

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Based on cooling technique, the data center cooling market is segmented into rack/row based and room based. The room based segment dominated the market, accounting for around 76.4% share in 2024, and the segment is expected to grow at a CAGR of over 9.7% between 2025 and 2034.
 

• Rack-based cooling includes in-rack units, rear-door heat exchangers, and direct-to-chip liquid cooling systems that target heat sources directly. These systems cut down on airflow losses and boost efficiency by positioning cooling closer to the heat loads. This makes them ideal for high-density AI and HPC environments.
   
• Row-based cooling systems, such as in-row liquid distribution units, provide modular and scalable thermal management across multiple racks. Their flexibility fits different layouts and workloads. They save energy while keeping rack temperatures stable, even during high-power operations that are common in AI and ML-driven data centers.
   
• Modern room-based cooling now includes AI-assisted optimization, variable-speed fans, and containment systems to improve adaptability. These updates help facilities adjust airflow and energy use in real time. This enhances sustainability and reliability while extending the lifespan of older cooling systems.
   

Based on data center size, the data center cooling market is segmented into small data center, medium data center, and large data center. Large data center segment dominated the market with around 44% share in 2024.
 

• Large and hyperscale data centers are major users of liquid cooling, AI optimization, and advanced thermal management systems. Their extensive infrastructure and high power demands drive ongoing innovation in precision cooling. These facilities establish performance standards that influence technology and efficiency in data center cooling systems.
   
• Small data centers are the fastest-growing segment, spurred by the rise of edge computing, IoT, and 5G rollouts. Their growth stems from the need for low-latency processing and compact, energy-efficient cooling systems designed for decentralized and remote operations that need minimal maintenance. These facilities are increasingly using modular and immersion cooling systems to handle high-density edge workloads.
   
• Medium data centers serve as a link between enterprise and hyperscale facilities. They support regional cloud and colocation infrastructure. These centers often test new cooling technologies, such as liquid-to-air systems and AI-driven thermal management. They test these technologies before rolling them out on a larger scale in hyperscale environments.
   
• Medium facilities prioritize flexibility and redundancy. They require cooling systems that can adjust to various workloads. As enterprise cloud adoption grows, the demand for efficient, upgradeable cooling infrastructure increases. This ensures these facilities keep performing well and remain cost-effective amid changing computational needs.
   

Based on application, the data center cooling market is divided into BFSI, colocation, energy, government, healthcare, manufacturing, IT & Telecom, and others. The BFSI segment accounting for around 22% share in 2024.
 

• The BFSI segment is the main area for data center cooling. This growth comes from the rapid digitalization of banking services and the rise in transaction volumes. The rise of real-time payment systems and AI fraud detection demands effective, high-performance cooling to ensure constant uptime and reliability.
   
• Colocation data centers are gaining popularity as businesses outsource their infrastructure to save on costs. This segment benefits from the growing use of modular and liquid cooling systems. These systems provide scalable thermal management in shared spaces and support different tenant workloads with high-density computing needs.
   
• The IT and Telecom sector is experiencing strong growth due to cloud services and the expansion of AI workloads. Telecom companies are upgrading their edge and core data centers. They are investing in precision and hybrid cooling systems that can handle the heat from 5G networks and advanced data transmission.
   
• In healthcare, the use of digital health records, imaging analytics, and AI diagnostics raises the demand for cooling systems that ensure data integrity and uptime.. Cooling technologies with backup designs and strict temperature control are crucial to meet healthcare data regulations.
   
• The manufacturing and energy sectors are adopting more cooling solutions to support industrial IoT, automation, and digital twin technologies. These facilities require robust cooling systems that can manage tough operational conditions. These systems also need to improve energy efficiency across distributed and crucial industrial computing setups.
   

Based on data center, the data center cooling market is divided into hyperscale, colocation, enterprise, edge, and cloud. The hyperscale segment accounting for around 22% share in 2024.
 

• The hyperscale data center segment leads the market, thanks to major investments from global cloud and AI companies. These facilities use high-density racks that exceed 100 kW. This setup requires liquid and immersion cooling systems to manage extreme heat loads and maintain steady performance at scale.
   
• Colocation data centers are growing as businesses adopt hybrid cloud strategies. Operators are combining row-based and modular cooling technologies. This approach offers scalable, multi-tenant environments that balance energy efficiency with the ability to handle different customer workloads and density needs.
   
• The enterprise data center segment is updating its cooling systems to support digital transformation and cloud migration. Companies are moving from traditional air cooling to AI-assisted and liquid-based solutions. This shift leads to better reliability, lower energy usage, and increased operational transparency in critical IT environments.
   
• Edge data centers are evolving quickly, fueled by 5G, IoT, and real-time analytics applications. These small facilities rely on modular, low-maintenance cooling systems designed for deployment in distributed, challenging environments where space and power are limited.
   

US dominated the data center cooling market in North America with around 89% share and generated USD 6.3 billion in revenue in 2024.
 

• The U.S. market is growing due to the large number of hyperscale facilities, with over 1,000 operating across the country. These centers represent more than 45% of North America's total data processing capacity and need effective cooling solutions to keep energy use efficient.
   
• The use of liquid and immersion cooling is increasing because AI workloads generate heat densities up to 5 times higher than traditional applications. U.S. operators are upgrading existing facilities to manage rack densities over 80 kW, speeding up the adoption of liquid cooling in major campuses.
   
• Top cloud service providers like Google, Microsoft, Meta, and Amazon are collectively spending billions to modernize cooling. They are incorporating rear-door heat exchangers and liquid-to-chip systems. These improvements have cut energy consumption per compute unit by about 25% in newer facilities.
   
• The Department of Energy has backed over 20 cooling efficiency projects since 2022 through initiatives like its High-Performance Computing Sustainability Program. These programs foster collaboration between private operators and research institutions to create low-carbon, high-efficiency cooling technologies suited for hyperscale use.
   
• Regulatory incentives that focus on keeping Power Usage Effectiveness (PUE) below 1.2 are also shaping market strategies. Many U.S. states provide tax credits for sustainable infrastructure, encouraging businesses to replace old air systems with hybrid and direct liquid cooling to comply with efficiency mandates.
   

The data center cooling market in Germany is expected to experience robust growth between 2025 and 2034.
 

• Germany’s market is influenced by strict national energy efficiency rules under the EU Green Deal framework. More than 60% of German data centers are making sustainability-focused upgrades. They are prioritizing cooling solutions that can cut energy use by up to 30%.
   
• Berlin, Frankfurt, and Munich host over 500 operational data centers. Many of these connect to district heating systems that reuse excess heat. About 40% of large German data centers are now using waste heat recovery to supply local residential and commercial heating systems.
   
• The German Energy Efficiency Act requires all new data centers to reach a minimum Power Usage Effectiveness (PUE) of 1.3 by 2027. This rule speeds up the use of liquid cooling and indirect evaporative cooling technologies across the country.
   
• Collaborations between the government and private companies, including Deutsche Telekom and NTT Global Data Centers, are creating heat reuse pilot projects. These initiatives aim for a 70% use rate of generated waste heat, setting standards for sustainable cooling systems in Europe.
   
• Germany also invests in research and development for cooling technologies that support renewable energy use. Since 2022, federal funding of over €150 million has backed innovations in immersion and rear-door cooling. This reduces operational emissions while keeping high-performance computing effective in hyperscale and enterprise facilities.
   

The data center cooling market in China is expected to experience rapid growth between 2025 and 2034.
 

• China’s market is growing quickly, with more than 800 large-scale data centers across the country. The government's digital transformation efforts and the goal of carbon neutrality are pushing operators to use efficient cooling systems that can cut energy use by up to 25%.
   
• Major operators like Alibaba, Tencent, and Huawei are investing heavily in immersion and liquid cooling technologies. By 2025, over 40% of new hyperscale data centers in China are expected to include liquid cooling to improve high-density computing performance.
   
• China’s varied climates, from the humid southern provinces to the dry northern regions, increase the need for flexible cooling designs. More than 60% of new facilities use hybrid cooling that combines evaporative and air-assisted methods to keep thermal efficiency in different environments.
   
• The Chinese government’s “East Data, West Computing” initiative encourages the creation of new green data hubs in inland provinces. These hubs use renewable energy and new cooling methods to lower annual power usage effectiveness (PUE) values from 1.6 to nearly 1.2.
   
• Local innovation in cooling hardware manufacturing is gaining momentum. More than 200 domestic companies are focusing on next-generation liquid and modular cooling systems. This local capacity strengthens supply chains and reduces reliance on foreign technologies while supporting sustainable infrastructure growth.
   

The data center cooling market in Brazil is expected to experience significant and promising growth from 2025 to 2034.
 

• Brazil's market is growing rapidly. More than 250 facilities are currently in operation, mainly in São Paulo and Rio de Janeiro. Rising investments in cloud infrastructure and digital transformation are boosting the demand for energy-efficient and environmentally friendly cooling systems.
   
• The country's tropical climate, with average yearly temperatures above 25°C, increases the need for liquid and hybrid cooling technologies. More than 45% of new data centers now use water-cooled or evaporative systems to ensure stability in high humidity.
   
• The Brazilian government supports the use of renewable energy in data centers, which promotes green cooling solutions. Almost 60% of facilities use hydroelectric power, boosting sustainability while reducing reliance on high-emission mechanical cooling.
   
• Key companies like ODATA, Ascenty, and Equinix are increasing capacity with modular cooling setups. These upgrades have improved average Power Usage Effectiveness (PUE) from 1.7 to 1.3, showing better efficiency and adherence to global best practices.
   
• Local research and partnerships with universities are promoting innovation in optimizing cooling fluids and reusing waste heat. These efforts aim to reduce energy costs by up to 20%. This will help Brazil become a leading data center hub in Latin America.
   

The data center cooling market in UAE is expected to experience significant and promising growth from 2025 to 2034.
 

• The UAE is becoming an important data center hub in the Middle East, with over 70 facilities in operation as of 2024. This growth is due to national digital transformation programs and significant investments from major companies like Amazon, Microsoft, and Oracle.
   
• Extreme weather, with summer temperatures exceeding 45°C, makes efficient cooling systems necessary. More than 50% of new data centers in the UAE now use liquid-based or hybrid cooling systems.
   
• Sustainability is a major focus of the UAE's plan for data center growth. Government programs, like the UAE Net Zero 2050 initiative, encourage the use of green cooling technologies. As a result, up to 40% of new projects now include cooling systems powered by renewable energy.
   
• Free zones, such as Dubai Silicon Oasis and Abu Dhabi's Khalifa Industrial Zone, offer infrastructure benefits. These consist of access to chilled-water networks and efficient HVAC systems. This has raised average Power Usage Effectiveness (PUE) levels across facilities to about 1.35.
   
• Partnerships with international cooling technology providers are driving innovation. Joint projects between UAE companies and global firms aim to cut cooling-related energy use by 25%.
   

Data Center Cooling Market Share

• The top 7 companies in the data center cooling industry are Schneider Electric, Vertiv Holdings, Johnson Controls, Rittal, Stulz, Airedale International, and Coolcentric, collectively hold around 30% of the market in 2024.
   
• Schneider Electric dominates the market with strong growth driven by its EcoStruxure platform and DCIM 3.0 integration. The $850 million acquisition of Motivair Corporation strengthens its liquid cooling capabilities for AI workloads and high-density applications.
   
• Vertiv secures the second position with continuous portfolio expansion through the Liebert line and CoolTera acquisition. Its 360AI platform, developed with NVIDIA and Intel, integrates power, cooling, and monitoring solutions tailored for AI data centers.
   
• Johnson Controls transitions toward integrated solutions through its newly established Global Data Center Solutions organization. This division provides end-to-end offerings from design and construction to maintenance, enhancing its service reach across data center lifecycle management.
   
• Rittal maintains a stable presence with a strong focus on IT infrastructure and cooling solutions for enterprise and industrial applications. Its market strength is particularly notable in Europe, where it continues expanding modular data center deployments.
   
• Stulz has enhanced its market presence through precision cooling systems and energy-efficient technologies. The company’s dedication to mission-critical environments enables consistent performance, supporting its growing reputation in sustainable and adaptive data center cooling.
   
• Coolcentric demonstrates exceptional growth through a strategic emphasis on liquid cooling innovation. Its technology partnerships and rapid expansion into high-density computing markets underscore its rising influence in the evolving global data center cooling landscape.
   

Data Center Cooling Market Companies

Major players operating in the data center cooling industry are:
 

• Airedale International
• Coolcentric
• Degree Controls
• Emerson Network Power
• Johnson Controls
• Motivair
• Rittal
• Schneider Electric
• Stulz
• Vertiv
   
• The data center cooling market shows moderate concentration. The distribution reflects a competitive yet fragmented environment. It offers plenty of opportunities for growth and gaining market share through innovation, partnerships, and product differentiation. The remaining includes regional manufacturers, niche cooling specialists, and new technology providers. They compete by offering custom, energy-saving, and affordable cooling systems. This mix balances established leaders with global operations and smaller innovators who can quickly meet changing customer needs and local thermal management challenges.
   
• Competitive intensity keeps increasing as the industry shifts toward smart, sustainable, and high-performance cooling systems. Established companies must consistently invest in research and development and digital capabilities. They need to integrate analytics, AI, and data center infrastructure management platforms to stay relevant. At the same time, new firms can speed up growth through partnerships, offering innovative cooling-as-a-service models and modular designs. As thermal management needs grow due to AI workloads and high-density computing, market consolidation is likely. Large multinationals are expected to acquire specialized firms to enhance their technology and sustainable offerings across various data center environments.
   

Data Center Cooling Industry News

• In October 2025, Johnson Controls announced a multi-million-dollar investment in Accelsius, a company that specializes in two-phase, direct-to-chip liquid cooling for data centers. This investment improves its cooling lineup. Accelsius’ NeuCool platform provides a 35% reduction in operational costs and lowers total ownership costs by 8 to 17%.
   
• In October 2024, Schneider Electric bought a 75% controlling stake in Motivair Corporation for $850 million. This purchase improved its liquid cooling capabilities with Motivair’s cooling distribution units, rear door heat exchangers, cold plates, and chillers for AI and high-density computing tasks.
   
• In November 2024, Flex bought JetCool Technologies. This purchase expanded its data center offerings with JetCool’s microconvective liquid cooling systems. These systems can cool racks up to 300 kW and can be scaled to 2 MW. They support major chipmakers and OEMs in AI-driven infrastructure.
   
• In October 2024, Jabil bought Mikros Technologies LLC, gaining over 30 years of experience in microchannel liquid cooling and cold plate designs that exceed 1 kW/cm². This acquisition allows for broader thermal management solutions for cloud providers and hardware OEMs.
   
• In October 2024, Submer secured a $55.5 million investment to improve immersion cooling solutions. The company partnered with Zero Two to provide sustainable AI computing solutions in the UAE, speeding up the development of efficient liquid-immersion cooling systems
   
• In June 2025, Green Revolution Cooling received new funding from Samsung Ventures, HTS, SK Enmove, and ENEOS. They also partnered with Samsung C&T to scale immersion cooling technologies that lower capital expenses, operational costs, and carbon footprints worldwide.
   
• In March 2025, Vertiv launched the CoolLoop Trim Cooler. This solution manages water temperature changes in liquid-cooled systems. It addresses current computational heat loads and expands their liquid cooling innovations.
   
• In April 2024, Carrier Ventures invested in Strategic Thermal Labs (STL) to work together on liquid cooling solutions for high-density computing. This effort helps Carrier reach its environmental goals by lowering energy use in data centers with new technology.
   
• In January 2024, Modine bought intellectual property and assets from TMG Core. This purchase expanded its Airedale brand to offer single- and two-phase liquid immersion cooling systems meant to manage heat from AI, 5G, and machine learning applications.
   

The data center cooling market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($Bn) from 2021 to 2034, for the following segments:

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Market, By Component

• Solution
  • Air conditioner
    • Air handling units
    • Split air conditioning systems
    • Packaged air conditioning units (PAC)
    • Others
  • Chilling unit
    • Air-cooled chillers
    • Water-cooled chillers
    • Glycol-cooled chillers
  • Cooling tower
    • Evaporative cooling
    • Dry
    • Others
  • Control system
    • Economizer system
    • Condensing
    • Non-condensing
  • Liquid cooling system
    • Direct to chip
    • Immersive
      • Single phase
      • Two phase
    • Others 
• Service
  • Consulting
  • Maintenance and support
  • Installation and deployment

Market, By Cooling Technique

• Rack/row based
• Room based

Market, By Data Center Size

• Small data center
• Medium data center
• Large data center

Market, By Application

• BFSI
• Colocation
• Energy
• Government
• Healthcare
• Manufacturing
• IT & Telecom
• Others

Market, By Data Center

• Hyperscale
• Colocation
• Enterprise
• Edge
• Cloud

The above information is provided for the following regions and countries:

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Poland
  • Benelux
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia
    • Brunei
    • Cambodia
    • Indonesia
    • Laos
    • Malaysia
    • Myanmar
    • Philippines
    • Singapore
    • Thailand
    • Timor-Leste
    • Vietnam
• South America
  • Brazil
  • Argentina
  • Colombia
  • Chile 
• MEA
  • South Africa
  • Saudi Arabia
  • UAE