Data Center HVAC Market Size & Share 2026-2035

Data Center HVAC Market Size

The global data center HVAC market was valued at USD 13.7 billion in 2025. The market is expected to grow from USD 15.6 billion in 2026 to USD 36 billion in 2035 at a CAGR of 9.8%, according to latest report published by Global Market Insights Inc.

Modern cooling solutions have become increasingly critical to efficiently manage greater thermal energy loads as there is increased demand for high-performance computing and AI, as well as hyper-scale and enterprise data centers. HVAC R&D is turning towards liquid cooling and thermal management as a solution to meeting these demands. In March 2025, Nvidia's Rubin Ultra NVL576 rack which employs liquid cooling can achieve power densities exceeding 600kW.

Increased regulatory scrutiny surrounding data center energy usage as well as ESG (environmental, social and governance) initiatives are now placing more scrutiny on energy usage and carbon emissions from data centers that have placed upward pressure on OPEX. Upgrading existing HVAC systems with, for example, the potential introduction of free cooling; eco-friendly refrigerants or improved airflow can help to address issues with PUE (Power Usage Effectiveness) in terms of meeting regulatory compliance and lowering operational costs.
 

The combination of increased load thresholds in typical data centers, heightened scrutiny around regulatory compliance, net-zero emissions and demand for energy efficiency has created an increasingly challenging environment for compact and flexible HVAC systems. In response, the industry will need to rethink how we build modular cooling units that can operate effectively in a wide variety of settings and geographies, where physical space is limited. In April 2023, SK Telecom signed an MoU to implement next-generation liquid cooling technology into their data centers to accommodate their high AI energy consumption requirements. As evidenced by multiple reports published throughout 2023, there has also been an increase in the number of retrofitting activities.
 

As such, older existing data centers are implementing modernized containment systems or liquid/hybrid cooling technologies to accommodate the increasing workloads associated with evolution of data centers' demands for reliability and life cycles, without the need for full rebuilding or major refreshes.
 

Data Center HVAC Market Trends

Cooling using liquid-cooled, directly connected to your microprocessor or graphics card, and Immersive (water) are becoming much more popular than traditional air cooling systems since these methods provide better heat transfer rates for the same amount of work done or the same density of the hardware and allow for 10 times more efficiency. In March 2025, CoolIT systems launched the first prototype of their liquid cooling cold plates which can handle an extremely high workload.
 

Modular cooling solutions have also become increasingly popular for their ability to quickly deploy, be scalable, and cause less disruption during upgrades in today's rapidly changing workloads.
 

With the combination of artificial intelligence and the internet of things will allow predictive temperature and humidity management as well as real-time tracking of temperature and humidity, all resulting in reducing the amount of power wasted on cooling equipment and increasing the amount of reliability.
 

Drawing on the use of ambient weather conditions such as free cooling and evaporative cooling systems as well as the use of Eco-friendly refrigerants can help all operators to save money on energy and reduce the environment impacts of cooling in suitable climates.
 

Data Center HVAC Market Analysis

Based on offering, the data center HVAC market is divided into solutions and services. Solutions dominated the market, accounting for 76% in 2025 and are expected to grow at a CAGR of 8.9% through 2026 to 2035.
 

• Predictive maintenance sensors provide early indications of system problems by using AI (artificial intelligence) to enhance air movement efficiency and decrease energy usage with HVAC controls.
   
• The adoption of liquid cooling will also help with cooling high density server environments (beyond traditional air conditioning systems) and help ensure that these systems are reliable and have a longer life span through environmentally sustainable methods.
   
• To reduce the risk of downtime at a data centre, HVAC remote monitoring services provide real-time monitoring and HVAC performance alerts. Proficient technicians who focus on HVAC services can provide custom optimization, initial maintenance, emergency repairs and upgrades to keep data centres operating at their highest potential and comply with ever-changing government regulations that affect the environment.
   
• The increasing demand for both hyperscale and edge data centres worldwide is creating a large demand for HVAC globally and will result in more capital being spent to build energy efficient systems.
   
• In addition to stricter sustainable regulations and the commitment of corporations to achieve net-zero greenhouse gas emissions, there is increased demand for low carbon cooling products and services, and many competitive innovations and best strategic partnerships will be created in different regions globally as this trend continues to grow.

Based on cooling technology, the data center HVAC market is segmented into air-based cooling, liquid cooling, evaporative cooling and hybrid cooling. Air-based cooling segment dominates the market with 50% share in 2025, and the segment is expected to grow at a CAGR of 8.8% from 2026 to 2035.
 

• In air-based cooling technology, advanced variable‑speed fans and AI‑optimized airflow management reduce energy use and hot‑spot formation. Increased use of outdoor air for free cooling is made possible using economizers. Modular and scalable CRAC/CRAH units can be used at hyperscale data centres and edge data centres worldwide.
   
• The growing density of power in servers is causing a significant expansion in the use of direct to chip cooling and immersion cooling. Innovative coolant fluids have improved thermal transfer while lowering the chance of leakage.
   
• Coolant innovations improve thermal transfer while reducing leak risk. Liquid loops with intelligent controls are being used by data centres for precise temperature control and to provide energy savings and higher rack densities and to support AI/ML workloads.
   
• Water‑efficient adiabatic and indirect evaporative systems reduce reliance on mechanical chillers, lowering energy costs and carbon footprints.The control of humidity is important for avoiding problems associated with corrosion and reliability. Adoption rates are increasing in dry climates and in facilities focused on sustainability and green certification that want to save money on their operating costs.
   
• A hybrid design appeals to an operator looking for optimal performance, energy savings and scalability across a wide range of data centre environments. Cooling methods that combine air, liquid and economizer facilities can adapt to variable loads and changing climate conditions.
   

Based on cooling technique, the data center HVAC market is segmented into room-based cooling, row-based cooling and rack-based cooling. The room-based cooling segment dominates the market with 64% share in 2025, and the segment is expected to grow at a CAGR of 8.9% from 2026 to 2035.
 

• Whole-room CRAC/CRAH systems with advanced airflow management optimize temperature uniformly. Integration with AI controls and economizers improves energy efficiency. Still popular for legacy and large facilities, room-based cooling supports modular retrofits while reducing hotspots and operational complexity.
   
• In-row cooling units positioned directly between racks offer targeted heat removal and lower energy consumption. Smart controls adjust airflow dynamically per row. Adoption grows in high-density data centers where precise, efficient cooling balances cost, space utilization, and thermal performance.
   
• Rack-level cooling solutions such as rear door heat exchangers and direct-to-chip liquid cooling provide the maximum density and the minimum thermal gradients possible. Proactive management is supported by integrating sensors with rack-level cooling systems. The demand for high density, high efficiency, localized cooling in limited spaces is growing in response to hyperscale and AI workload development.
   

Based on data center, the data center HVAC market is segmented into enterprise data centers, colocation data centers, hyperscale data centers and edge data centers. The hyperscale data centers segment is expected to dominate the market with a share of 38% in 2025.
 

• Businesses are utilizing energy-efficient HVAC upgrades/modular cooling to maximize the efficiency of their in-house IT operations. With AI-powered monitoring and predictive maintenance being incorporated into these upgrades, businesses achieve continual uptime while balancing their costs associated with energy efficiency, performance, and environmental responsibility providing support for both legacy equipment and internal workloads with minimal disruption.
   
• Colocation companies are using newer state-of-the-art cooling technologies to provide a highly reliable and energy-efficient type of cooling for each of their many different types of clients. Many colocation provider facilities utilize an AI-powered monitoring system, scalable modular systems, and hybrid cooling to ensure a consistent level of performance when providing services for many different tenants, as well as to reduce both their overall operational cost and power usage effectiveness (PUE).
   
• Hyperscale companies are installing both liquid and high-efficiency air cooling to provide cooling for very high-density servers and to support AI workloads. To improve the efficiency and performance of cooling systems, thermal management solutions use data, hot/cold aisle containment, and renewable energy to provide better sustainability, reliability, and scalability while being aligned with a global growth strategy for both cloud services and hyperscale companies.
   
• Edge facilities use compact, modular and energy-efficient cooling technologies to support localized computing and low-latency applications. Most edge facilities use hybrid and air-based cooling solutions, while also using AI-enabled systems to optimize performance in very small spaces as well as to provide rapid deployment and remote management capabilities that meet the increasing demand for IoT devices, 5G and low-latency solutions.

US data center HVAC market reached USD 4.7 billion in 2025, growing from USD 4.1 billion in 2024.
 

• In US, data centers are reducing costs and uptime through Predictive HVAC Controls using AI. Increased demand along with integrating Enterprise Cloud workloads has created a demand for a more efficient way of cooling, while state electrification incentives and decarbonization policies have increased investment.
   
• AI and HPC workloads are driving liquid and immersion cooling adoption from hyperscale applications to enterprise campuses. Intelligent building management is integrating with smart-grid resources to help balance demand charges, peak load reduction and renewable energy use.
   
• Sustainability is becoming a focus for HVAC procurement due to regulatory and ESG requirements that require the use of heat-recovery systems and waste heat reuse in district energy. Recommended standards such as ASHRAE and DOE. Guidelines are affecting design decisions, and as energy-efficient economizers and advanced filtration will be increasingly demanded across all data center segments.
   

North America data center HVAC market has a market size of USD 5.7 billion in 2025.
 

• In North America, colocation providers are adopting modular HVAC systems to increase capacity. Standardization of AI control and Remote Management will increase efficiency and decrease downtime risks by eliminating the need for technicians.
   
• Edge expansion in North America is leading to a demand for compact low energy HVAC systems with smaller footprints, as compared to other solutions found elsewhere. These systems are being designed to provide a balance of air, water cooling, and newer liquid cooling technologies based on reliability, perception of noise and zoning regulations at the local level.
   
• The reshoring of the Supply Chain in North America has led to increased manufacturing investment. Predictive analytics enhance asset life cycles, reducing total cost of ownership and enabling preemptive maintenance across climates like desert Southwest and humid Atlantic coast.
   

Europe data center HVAC market accounted for a share of 25.6% and generated revenue of USD 3.5 billion in 2025.
 

• EU nations are installing circular HVAC systems. This includes recovering, re-using and recycling both heat and equipment. EU Green Deal funding supports the rapid implementation of high-efficiency refrigerants, adiabatic cooling, and hybrid systems, which lower the environmental impact of cooling, while providing long-term price stability for end customers.
   
• Pan-European HVAC service providers are standardizing AI based HVAC systems across multiple sites. Centralized operating and management of the systems across the continent allows for performance comparisons and compliance documentation to the following standards: GDPR, Eco-Design and local laws.
   
• Differences in climate from region to region in Europe have driven the need for adaptive HVAC design; ranging from evaporation systems in the Mediterranean to economizer dominated systems in the Northern Europe.
   

Germany data center HVAC market is showcasing strong growth potential, with a CAGR of 10.2% from 2026 to 2035.
 

• Energy efficiency and waste-heat reuse at German data centers is a way to align with German and EU climate goals, while using district heating systems to return data center heat back into urban heating networks, and reduce electricity consumption, thereby lowering their carbon footprint, using advanced HVAC systems that operate under relevant and rigorous regulations.
   
• Exceptional engineering talent provides liquid cooling solutions that are tailored to meet the needs of manufacturers, automotive, as well as research facilities.
   
• Reliable grids have encouraged demand responsive HVAC systems across Germany's data center sectors.
   
• Data centers are adjusting their cooling loads in real-time to signals from the grid, using on-site battery storage and renewable energy sources. Utilities and operators have established partnerships to develop resiliency plans for extreme heat and extreme cold weather events.
   

The Asia Pacific data center HVAC market is anticipated to grow at the highest CAGR of 11.8% from 2026 to 2035 and generated revenue of USD 2.8 billion in 2025.
 

• APAC's tremendous growth in cloud and mobile computing is resulting in a large expansion and the establishment of data centers in India, Southeast Asia, and Australia. This is also accelerating the rollout of more efficient, modular, and resilient HVAC systems for these data centers.
   
• The integration of various systems such as economizers, AI control systems, and humidity control solutions will help address the challenges associated with tropical climates and minimize risk to uptime.
   
• As environmental pressures and the cost of energy increase, the adoption of evaporative and hybrid cooling systems is also being accelerated. Nations are looking closely at water-efficient strategies to maintain a balance between energy and resource use throughout various regions of the world, especially those that experience monsoons, where design assumptions are often tested by humidity and rainfall.
   
• In many regions there is a growing local manufacturing and service infrastructure that enables deployment of technology to be emerging economies in less time than would be possible if importing products from developed countries.
   
• Standardized HVAC systems that can be monitored from remote locations provide the means to scale HVAC systems for Enterprise and Colo and other businesses, even though the companies involved have little or no experience with HVAC systems.
   

China data center HVAC market is estimated to grow with a CAGR of 12.3% from 2026 to 2035.
 

• China's rapid growth of hyperscale data centers and AI clusters has resulted in a corresponding demand for high-density cooling solutions, especially for immersion and direct-to-chip cooling.
   
• The integration of HVAC systems for data centers that can withstand the rigors of high-performance computing while also meeting national energy regulations that dictate the amount of energy that can be consumed by a data center will continue to develop.
   
• Supportive manufacturing facilities in China enable the development and implementation of low-cost, scalable HVAC platforms that can be optimized for the varying climates around the country from the northernmost regions to the southernmost. IoT sensors, smart Chinese controls, and localized optimization will help to eliminate the need for foreign components, thus improving efficiency and reducing costs.
   
• Government targets for reducing energy intensity and emissions are driving the adoption of renewable energy in conjunction with heat recovery. Such initiatives will result in development of district energy systems and heat storage solutions.
   

Latin America data center HVAC market shows lucrative growth over the forecast period.
 

• The cost-effective and scalable HVAC systems in Latin America balance performance and operating expenses, with air-based economized designs using automation to conserve energy and manage maintenance on tight budgets.
   
• Humidity in the region drives innovation in dehumidification and adaptive airflow, and HVAC systems include sensors to help mitigate moisture issues, thereby reducing energy usage and improving reliability for colocation and enterprise facilities.
   
• With investments in fiber optics and 5G driving the rollout of edge facilities into smaller cities, compact, robust cooling systems provide remote monitoring, fault tolerances, and minimal on-site staffing due to the increase in infrastructure distributed.
   

Brazil data center HVAC market is estimated to grow with a CAGR of 7.2% from 2026 to 2035 and reach USD 753.8 million in 2035.
 

• Brazilian data centers implement energy-efficient air- and hybrid-cooling methods to offset electricity costs and to address limitations of the Brazilian grid. Service providers focus on reducing PUE, developing intelligent controls, and using economizers periodically during the cooler dry season to reduce overall usage.
   
• The combination of tropical and humid climates creates demand for HVAC systems designed for high performance humidity control. Superior air filtration and handling techniques help minimize equipment corrosion from excess humidity and stabilize predictive humidity systems that perform well in conditions of dramatically fluctuating temperature.
   
• The focus on sustainability drives projects to incorporate renewable energy and thermal storage. Some projects are exploring solar-powered cooling and thermal batteries shift energy usage away from peak load times, improving reliability as the grid becomes less predictable and assisting corporations in achieving corporate sustainability objectives.
   

The Middle East and Africa data center HVAC market accounted for USD 760.1 million in 2025 and is anticipated to show lucrative growth over the forecast period.
 

• MEA's data centers focus on hybrid HVAC systems and heat-tolerant air for desert climates; using economizers and thermal storage helps reduce the extreme ambient temperature while minimizing reliance on power-hungry chillers.
   
• Utilizing solar generation to align HVAC loads with peak generation reduces fuel costs and emissions; intelligent orchestration between renewable energy sources and the corresponding cooling systems enhances the reliability of the grid and reduces the amount of time that diesel backup systems are in use.
   
• Rapid adoption of digital technology by governments (via cloud computing initiatives) is driving modular colocation deployments with adaptable and robust cooling. Similar standardized platforms and remote diagnostic capabilities help bridge the significant skills gaps found throughout vast regions, improving uptime and total lifecycle costs.
   

UAE is expected to experience substantial growth in the Middle East and Africa data center HVAC market, with a CAGR of 4.6% from 2026 to 2035.
 

• With growing demand of hyperscale and edge data center in the UAE, there is increased demand for ultra-efficient hybrid cooling systems that can accommodate arid heat. The pairing of economizers and evaporative cooling systems and liquid cooling loops decreases the energy required for the operation of traditional chillers while maintaining acceptable service levels.
   
• Sustainability vision goals related to national vision are accelerating the pace of renewable integration with HVAC. Utilizing heat recovery for district energy projects and implementing AI-managed controls, along with high-efficiency HVAC equipment, are leading to decreased PUE while further aligning data centers with net-zero goals and LEED certification requirements.
   
• Developing strategic colocation center hubs will attract foreign direct investment and promote the use of standardized, scalable systems for HVAC. The focus on decreasing total costs of ownership and deploying predictive maintenance will improve reliability, service levels, and offerings to global cloud and enterprise customers.
   

Data Center HVAC Market Share

• The top 7 companies in the market are Vertiv, Schneider Electric, Johnson Controls, Trane Technologies, Carrier Global, Daikin Industries and STULZ, which contributed 67% of the market in 2025.
   
• Vertiv is recognized as a market leader in the development and implementation of precision air, modular chiller, liquid cooling and hybrid cooling systems for their data center infrastructure product line and AI-enabled thermal control. The company also offers Liebert products that couple with the power and monitoring systems of Vertiv for optimized efficiency and uptime.
   
• Schneider Electric is an industry leader in providing advanced cooling products and systems for data center infrastructure through its EcoStruxure platform which incorporates air, liquid and remove cooling technologies, as well as Internet of Things (IoT)-enabled controls. The range of products offered by Schneider includes products related to precision cooling, thermal monitoring, automation, and sustainability solutions.
   
• Johnson Controls, a leading provider of energy efficient chillers and modular cooling systems with its YORK brand, as well as HVAC systems that utilize OpenBlue digital controls and integrated chiller, air handling and HVAC systems through its Silent-Aire product line.
   
• Trane Technologies is a provider of energy-efficient chillers, air handling units and liquid/immersion cooled systems, primarily for mission-critical data centers. They are focused on providing energy-efficient and sustainable solutions for HVAC systems that lower energy usage while supporting high-density workloads. Trane emphasizes the importance of modularity and energy optimization during the design and construction of HVAC systems.
   
• Carrier Global manufactures high-performing industrial chillers, fine-tuned air and energy systems, and lifecycle optimization for data centers. Its HVAC solutions connect building and IT Infrastructure, provide visibility to control, create energy savings and lower emissions, as well as support continuous operations throughout their data center lifecycle.
   
• Daikin offers full-spectrum HVAC solutions for data centers with multiple cooling options (air, liquid, and hybrid) customized to fit hyperscale, enterprise, edge locations, with an emphasis on energy saving, precision control and scalability features paired with cloud-based monitoring and after-market support services. In addition to these offerings, Daikin also provides low-GWP refrigerants and advanced thermal designs as part of its solutions portfolio.
   
• STULZ specializes in precision cooling and the thermal management of mission critical facilities using flexible and modular design systems. Their product line includes CRAC/CRAH units; chillers; adiabatic/free cooling; and advanced environmental monitoring solutions on a global basis while achieving high availability levels and ESG goals. Their design philosophy emphasizes scalable infrastructure solutions; global partner relationships; and energy-efficient designs to meet the needs of colocation data centers and cloud-oriented data centers.
   

Data Center HVAC Market Companies

Major players operating in the data center HVAC industry are:

• Alfa Laval
• Carrier Global
• Daikin Industries
• Danfoss
• Johnson Controls
• Modine Manufacturing
• Schneider Electric
• STULZ
• Trane Technologies
• Vertiv
   
• The market for HVAC systems in data centers is quite competitive. The goal for companies involved is to be able to provide their customers with high-quality solutions that meet their specific needs. Many of the leading suppliers of this type of equipment are multinational corporations like Carrier Global, Daikin Industries, and STULZ. The suppliers are using advanced cooling options (e.g., liquid- and air-based technologies) to solve the challenges that arise in large hyperscale, colocation, enterprise and edge data centers.
   
• Innovation in energy-efficient HVAC solutions, the use of artificial intelligence in HVAC system-level monitoring applications, and the use of modular and scalable products are the three main things that are driving competition among suppliers in the HVAC data center market. Through mergers and partnerships with other companies, as well as the use of strategic acquisitions to develop integrated solutions, companies can gain competitive advantages over their competitors by developing products that improve the reliability of data center operations, lower data center operational costs, and help meet market sustainability initiatives.
   
• To differentiate themselves, HVAC manufacturers are focusing on providing innovative HVAC solutions that utilize new technologies to create services that customers are interested in, and that have regional operations in multiple separate locations. Service companies can create customer loyalty by providing excellent service and support when it comes to the installation and maintenance of HVAC systems in data centers by providing remote monitoring, preventative maintenance, and system optimization services.
   

Data Center HVAC Industry News

• In January 2025, Schneider Electric announces that they will be producing the CoolChip DTC-500, which is part of a new series called EcoStruxure IT Liquid Cooling Solutions for HyperScale AI applications. This covers all NVIDIA HGX ai platforms and allows for a variety of rack densities including 120kw.
   
• In December 2024, Vertiv acquire innovative thermal management technologies from CoolIT Systems. This includes expertise in Direct-to-Chip Liquid Cooling and Cold Plate Cooling strategies. The merger will allow Vertiv to continue integrating these new technologies into its Liebert product line through 2025 and increase their competitiveness within the rapidly growing Liquid Cooling industry.
   
• In November 2024, Johnson Controls International and Microsoft formed a multi-year partnership to design an innovative hybrid air/liquid cooling solution that combines the best of both worlds in terms of cooling AI workload using Azure AI for predictive thermal management. Both companies will begin pilot programs in early 2025 to help quantify the impact that these combined efforts are likely to have on future data center cooling architecture within the HyperScale segments.
   
• In October 2024, Carrier Global Corporation unveiled its Abound Edge system which is designed specifically for 5G Edge Data Centers. The systems incorporate integrated Power/Monitoring and can accommodate loads ranging from 25kw to 100kw.
   

The data center HVAC market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue ($ Mn/Bn) and shipments (units) from 2022 to 2035, for the following segments:

Click here to Buy Section of this Report

Market, By Offering

• Solutions 
  • Cooling infrastructure solutions
  • Airflow management & containment solutions
  • Liquid cooling integration solutions
  • HVAC automation & control solutions
  • Thermal monitoring & management solutions
  • Energy optimization & free cooling solutions
  • Modular / scalable cooling solutions
  • Edge data center cooling solutions
• Services
  • Professional services
    • Consulting & design
    • Maintenance and support
    • Installation and deployment
  • Managed services

Market, By Cooling Technology

• Air-based cooling
• Liquid cooling
• Evaporative cooling
• Hybrid cooling

Market, By Equipment-level

• Air conditioning systems
• Chillers 
• Air handling units (AHU) 
• Liquid cooling systems
• Cooling towers
• Economizer systems 
• Control systems
• Others 

Market, By Cooling Technique

• Room-based cooling
• Row-based cooling
• Rack-based cooling

Market, By Data Center Type

• Enterprise data centers
• Colocation data centers
• Hyperscale data centers 
• Edge data centers

Market, By End use

• IT & Telecommunications
• BFSI 
• Government & Defense
• Healthcare 
• Manufacturing 
• Retail & E-commerce 
• Energy & Utilities
• Research & Academic
• Others

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

• North America
  • US
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Poland
  • Romania
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Vietnam
  • Indonesia
• Latin America
  • Brazil
  • Mexico
  • Argentina
• MEA
  • South Africa
  • Saudi Arabia
  • UAE