Data Center Cooling Market Size & Share, Trends, Growth Report (2026–2031)
GLOBAL DATA CENTER MARKET SIZE AND SHARE
| MARKET SIZE (INVESTMENT) | USD 63.03 Billion |
| CAGR - INVESTMENT (2025-2031) | 15.20%. |
| HISTORIC YEAR | 2022- 2024 |
| BASE YEAR | 2025 |
| FORECAST YEAR | 2026-2031 |
| MAJOR PLAYERS | 3MAAONAccelsiusAermecAggrekoCanovate GroupDelta Electronics |
GLOBAL DATA CENTER MARKET ANALYSIS
The global data center cooling market size was valued at USD 26.96 billion in 2025 and is expected to reach USD 63.03 billion by 2031, growing at a CAGR of 15.20% during the forecast period. Cooling infrastructure is the most critical element of thermal management, keeping IT equipment within safe operating temperatures. As operators deploy power-intensive racks for artificial intelligence (AI), machine learning (ML), high-performance computing (HPC) and cloud workloads, investment in advanced cooling is accelerating worldwide.
In 2025, cooling infrastructure investment grew by around 63.89% over 2024. Alongside conventional CRAC and CRAH units, operators are buying high-efficiency chillers, cooling towers, dry coolers, coolant distribution units (CDUs), rear-door heat exchangers, intelligent cooling controls and heat rejection systems to improve efficiency and cut energy use. Suppliers that are not yet in this expanded product set are already losing specifications.
Hyperscale cloud companies and colocation operators are lowering Power Usage Effectiveness (PUE) and minimizing water consumption, so they are modernizing mechanical infrastructure with modular, scalable and hybrid cooling architectures built for rack densities above 100 kW. Vendors should design products around these densities now, because retrofitting a product line after the design cycle closes costs share.
In 2025, North America led the market with around 60% of global cooling investment, followed by APAC, Europe and other regions. Operators are also deploying automated cooling controls, advanced monitoring platforms, digital twins and predictive maintenance to optimize cooling performance and operating cost.
Key Insight: The market is growing on two fronts at once, with liquid cooling adding to air-based demand instead of replacing it.
Key Report Takeaways
- Infrastructure - The cooling system segment accounted for the largest market share of around 77% in 2025.
- Cooling Systems - The chiller units segment accounted for the largest global data center cooling market share of around 38% in 2025.
- Cooling Technique - The liquid-based cooling segment is projected to grow at the fastest CAGR of 18.94% during the forecast period.
- Liquid-Based Cooling Techniques - The water-based cooling segment dominated the global data center cooling market in 2025.
- Tier Standards - The Tier III segment dominated the global data center cooling market in 2025.
Note: Market size and forecast figures are generated using Arizton's proprietary estimation framework, based on facility-level primary and secondary research, updated as of the current reporting cycle.
Global Existing & Upcoming Data Center Portfolio
EXISTING FACILITY DATA POINTS
- Location — region, city, full address
- Operator / owner name & facility name
- Core & shell white-floor area
- Core & shell IT load capacity
- Rack Capacity
- Tier standard (I–IV) & redundancy design
- Year of operations
UPCOMING FACILITY DATA POINTS
- Investor name & location
- Planned area & power capacity (MW)
- Total investment (USD Million)
- Electrical / mechanical / construction investment split
- Announcement year & project status
- Expected year of opening
- Retail & wholesale colocation pricing
DATA CENTER COOLING MARKET TRENDS AND DRIVERS
DRIVERS
Surge in Integration of District Heating for Data Center Waste Heat Recovery
As the demand for data center infrastructure continues to expand, data center companies are focusing on enhancing energy efficiency and minimizing the facilities' environmental impact. Therefore, the operators are increasingly investing in integrating district heating networks into data centers to repurpose waste heat.
Instead of releasing the heat generated by IT equipment into the atmosphere, modern data center facilities are capturing the heat generated by servers to transfer it to local district heating networks to address the heat requirements of nearby homes, schools, hospitals, and other commercial buildings.
In May 2026, the prominent global data center company, namely Telehouse, installed a direct-to-chip liquid cooling technique at its data center in Toronto, Canada; the company revealed that it will capture the heat from liquid-cooling equipment to transfer it to Enwave’s district heating network to repurpose the waste heat.
Modern liquid cooling systems are designed to efficiently capture waste heat generated by IT equipment in facilities at suitable temperatures to repurpose it by supplying it to local district heating networks. Therefore, data center companies are likely to invest in advanced cooling systems, which can recover usable thermal energy to enhance sustainability in their facilities.
Growth in Data Centers Targeting PUE< 1.4
Power Usage Effectiveness (PUE) is one of the standard metrics for measuring data center energy efficiency by comparing total facility power consumption with the power used by IT equipment; a PUE closer to 1.0 indicates greater efficiency, and as artificial intelligence, cloud computing, and high-density workloads drive the demand for higher energy, data center operators are targeting PUE values below 1.4 to reduce operational costs while improving sustainability.
In June 2025, the data center services provider, Northern Data, launched a new data center facility, offering power capacity of around 20 MW in Pittsburgh, Pennsylvania; the facility is equipped with a direct-to-chip liquid cooling technique, and it has been designed with a Power Usage Effectiveness of around 1.15.
To achieve PUE values below 1.4, data center operators are investing in advanced cooling technologies like liquid cooling, direct-to-chip cooling, free cooling, intelligent airflow management, and AI-driven cooling optimization to improve thermal efficiency, reduce energy consumption, support higher rack densities, and meet strict sustainability targets.
RESTRAINTS
High Levels of Water Consumption by Data Centers
As data centers continue to expand to support cloud, AI, and HPC, the concerns related to water consumption are increasing significantly. Many conventional cooling systems, including evaporative cooling and water-based cooling technologies, require huge water to remove heat from IT equipment.
The advanced cooling systems offer effective thermal management and improve energy efficiency, but their high-water usage is becoming a significant challenge, particularly in regions facing water scarcity. The rapid growth of AI workloads is further increasing cooling requirements, creating greater demand for water-intensive cooling systems.
Large hyperscale and colocation data centers consume millions of litres of water each year for cooling operations. In locations experiencing droughts and limited water availability, data center operators are facing pressure from governments, local communities, and environmental organizations to reduce water consumption.
Therefore, the cooling infrastructure providers are continuously developing innovative water-efficient cooling solutions that minimize water consumption while maintaining effective cooling operations in modern data centers.
High Power Consumption by Data Centers
The rapid expansion of cloud computing, artificial intelligence (AI), and high-performance computing (HPC), is increasing electricity consumption in data centers. Modern AI servers and GPUs require more power than traditional IT infrastructure. As power consumption increases, the amount of heat generated in data centers will also increase, putting rising pressure on cooling systems to maintain optimal temperatures.
Advanced cooling solutions such as liquid cooling, precision cooling, and intelligent thermal management solutions provide efficient cooling mechanisms in data centers to support higher rack densities; however, these systems often increase overall electricity consumption. In regions where electricity prices are high, data center operators may reduce investments in advanced cooling infrastructure.
As the development of AI-optimized data centers continues to rise, data center operators must allocate additional electricity for cooling infrastructure. In some locations, limited grid capacity and delays in securing power connections restrict the deployment of advanced cooling systems.
Cooling equipment manufacturers are continuously developing innovative and energy-efficient cooling solutions that reduce electricity consumption while delivering high thermal performance for modern data centers.
DATA CENTER COOLING MARKET TRENDS
Rise in Adoption of Artificial Intelligence (AI) to Drive Demand for Cooling Infrastructure
The increasing adoption of artificial intelligence (AI) among businesses across diverse sectors, including research, government, finance, technology, healthcare, and others, is rising the need for AI-ready data centers, leading operators to invest in installing energy-efficient and advanced cooling infrastructure in their facilities to optimize thermal management in high-performance computing environments.
In February 2025, the direct-to-chip cooling solutions company, Accelsius, collaborated with Nordik Data Centers to develop an AI-optimized data center in Montreal, Canada, that will be powered with 100% renewable energy.
AI-optimized data centers are equipped with advanced servers and GPU clusters to efficiently support AI and HPC workloads, and the facilities consume huge amounts of electricity, which generate more volumes of heat, increasing the requirement for advanced liquid cooling infrastructure in data centers to optimize thermal management. Therefore, the deployment of advanced liquid cooling technologies is anticipated to rise significantly over the next five years with increasing advancements in artificial intelligence technologies.
Innovations in Data Center Cooling Techniques
The surge in the expansion of emerging technologies like artificial intelligence, machine learning, cloud computing, and high-performance computing is leading to a rise in the demand for advanced cooling infrastructure in data center facilities. Conventional cooling systems are becoming insufficient to handle large amounts of heat generated by GPU clusters. Therefore, the cooling equipment manufacturers are focusing on developing advanced solutions to enhance thermal performance in data centers, while minimizing energy and water consumption.
In July 2026, the global technology company NTT Facilities introduced the FMACS-VI air conditioner, offering cooling capacity of approximately 63kW to boost thermal management in data centers.
In June 2026, the Japanese company Nidec Corporation launched a high-capacity in-rack cooling distribution unit (CDU), delivering over 300 kW of cooling capacity to support high-density AI hardware like GPU clusters.
As the need for cloud computing, Artificial Intelligence, and high-density computing continues to surge, innovations in cooling systems are likely to increase over the next five years in the data center industry. Advancements in cooling infrastructure are anticipated to attract data center operators to invest in adopting sustainable and innovative cooling equipment to enhance thermal management in data centers during the forecast period.
SEGMENT ANALYSIS
IT INFRASTRUCTURE
The global data center cooling market by infrastructure is segmented into cooling systems and other mechanical infrastructure. Cooling systems held around 77% share in 2025, reflecting strong demand for thermal management. These systems manage IT heat through air- and water-based technologies. Companies supplying CRAC and CRAH units, chillers, cooling towers, dry coolers, economizers and evaporative coolers should focus on this segment to capitalize on continued data center build-outs across regions.
As rack power rises, operators are also exploring liquid cooling, which uses the superior heat transfer of water or other fluids for high-density racks. This opens room for providers of advanced, energy-efficient cooling. Datacom's Abel data center in Wellington, New Zealand, uses a hybrid system supporting both air and liquid cooling, showing the opportunity for vendors offering flexible solutions that support future capacity expansion.
COOLING SYSTEMS
Based on cooling systems, the chiller units segment accounted for the largest global data center cooling market share of around 38% in 2025, highlighting strong demand for reliable and efficient cooling infrastructure. Chillers supply chilled water to CRAH units and work with cooling towers, dry coolers or condensers to remove heat. Suppliers of chillers and supporting equipment should focus on this segment to benefit from growing deployment of high-density server racks and clusters, and manufacturers of energy-efficient chillers can address operators' reliability and power requirements.
Chiller electricity use depends on the energy needed to cool water to the target temperature. Colder climates can reduce chiller power use in winter, while hotter regions need more capacity and energy. Manufacturers should position and price chiller solutions by climate zone.
In September 2026, LG launched an oil-free, air-cooled centrifugal chiller for AI data centers using magnetic bearing technology, which removes lubricating oil and reduces friction losses. This shows the opportunity for chiller makers to target AI projects with high-efficiency designs.
COOLING SYSTEMS
Based on cooling systems, the chiller units segment accounted for the largest global data center cooling market share of around 38% in 2025, highlighting strong demand for reliable and efficient cooling infrastructure. Chiller units supply chilled water to Computer Room Air Handler (CRAH) units and work alongside cooling towers, dry coolers, or condensers to remove heat from data centers. Companies supplying chiller units and supporting cooling equipment should look into this segment to capitalize on the growing deployment of high-density server racks and concentrated server clusters. As these facilities require reliable and dedicated power supplies, manufacturers offering energy-efficient chiller solutions can address key operator requirements.
Chiller electricity consumption depends on the energy required to cool water to the desired temperature. Facilities operating in colder climates may benefit from lower chiller power consumption during winter, while data centers in hotter regions may require greater cooling capacity and energy input. Equipment manufacturers should consider these regional differences when developing and positioning chiller solutions for data center projects.
In September 2026, LG launched an oil-free, air-cooled centrifugal chiller for AI data centers that uses magnetic bearing technology to suspend the compressor shaft without physical contact, eliminating lubricating oil and reducing mechanical friction losses. This development highlights opportunities for chiller manufacturers and technology providers to target AI data center projects with advanced cooling solutions designed to improve efficiency and support increasing rack densities.
TIER STANDARD
Based on tier standards, the Tier III segment dominated the global data center cooling market in 2025. A Tier III data center requires a minimum of N+1 redundancy in power and cooling infrastructure, with around 1.6 hours of annual downtime and 99.982% availability. Companies supplying cooling equipment, redundant cooling systems, and thermal management solutions should target this segment to capitalize on the growing demand for reliable infrastructure. The expansion of hyperscale facilities, cloud services, and high-density computing workloads creates opportunities for vendors offering efficient cooling solutions that minimize downtime and support operational continuity.
The Dammam data center facility, operated by center3 in Saudi Arabia, has received Tier III certification from the Uptime Institute for its design documents and constructed facility. This creates a reference point for suppliers seeking to position their cooling solutions for certified data center projects across the region.
LIQUID-BASED COOLING TECHNIQUES
Based on liquid-based cooling techniques, the water-based cooling segment dominated the global data center cooling market in 2025. Companies supplying water-cooling equipment should look into this segment, as adoption is increasing among data centers operating in tropical climates. As operators prioritize data center development in coastal regions, seawater emerges as a potential cooling source, creating opportunities for companies offering suitable cooling solutions. In addition, advancements in modern chiller technologies are further supporting demand for water-based cooling systems, creating opportunities for chiller manufacturers and infrastructure providers.
The New Cairo Data Center facility, operated by Raya Data Center in Egypt, uses a DX-chilled water-cooling technique, highlighting opportunities for cooling technology providers targeting emerging data center projects.
Liquid Cooling vs Air Cooling: Which Cooling Technique Will Grow Fastest?
The liquid-based cooling segment is projected to grow at the fastest CAGR of 18.94% during the forecast period. Liquid cooling is increasingly used in HPC and AI facilities where conventional air cooling struggles with high-density IT. It includes water-based cooling, immersion cooling and direct liquid cooling, along with chilled-water systems and refrigerant- and glycol-based systems.
Rear-door heat exchangers also create openings for cooling providers, since they install at rack level and use server fans to push warm air through the heat exchanger. Vendors should offer rack-level solutions for operators expanding high-density infrastructure, and manufacturers should explore all of these options for new and existing facilities.
Key Insight: Air cooling and liquid cooling will coexist for the forecast period, so portfolios that cover both will win the most specifications.
GEOGRAPHY ANALYSIS
North America
Western Europe
Nordics
Middle East
APAC
Which region should a cooling supplier enter first?
COMPETITIVE LANDSCAPE
The market includes HVAC manufacturers, liquid cooling companies, precision cooling specialists and thermal management providers. As operators shift toward AI-driven computing, vendors are expanding into direct-to-chip, immersion, CDUs, rear-door heat exchangers, dielectric fluids and AI-optimized cooling control software alongside traditional air-based equipment. Hyperscale and colocation operators are investing in scalable, sustainable cooling for rack densities above 100 kW while minimizing energy and water use.
- HVAC and cooling equipment manufacturers: Carrier, Daikin Applied, Trane, Mitsubishi Electric, STULZ, Vertiv, Schneider Electric, Munters, Airedale, FläktGroup, Systemair Group, Kirloskar Chillers, Lennox International, Nortek Air Solutions, AIRSYS, ENVICOOL, HiRef S.p.A., ClimateWorx International, AAON, Nanjing Canatal Data-center Environmental Tech and others are adding energy-efficient compressors, intelligent airflow management and modular cooling systems.
- Liquid cooling solutions providers: Accelsius, CoolIT Systems, Submer, Iceotope, ZutaCore, Green Revolution Cooling (GRC), Asperitas, DCX Liquid Cooling Systems, Midas Immersion Cooling, SuperX AI Technology, Wafr Technologies and others are collaborating with server manufacturers, semiconductor companies, hyperscalers and colocation providers.
- Thermal management equipment manufacturers: Alfa Laval, Baltimore Aircoil Company, EVAPCO, Güntner, Danfoss, Wakefield Thermal, Dew Point Systems and others are introducing equipment that improves heat rejection and coolant circulation.
- Intelligent thermal management and controls: Siemens, Honeywell, Delta Electronics, Hitachi Energy, Degree Controls, Legrand, nVent, Austin Hughes Electronics, Cooler Master, CITEC International and others deploy monitoring systems, intelligent controllers and environmental monitoring equipment.
- Immersion fluids and coolants: Engineered Fluids, Dow, The Chemours Company, The Lubrizol Corporation, Castrol and others are developing next-generation dielectric fluids that improve IT equipment lifespan and sustainability.
Traditional HVAC manufacturers are adding liquid cooling and intelligent thermal management, while liquid cooling companies are partnering with cloud providers and server OEMs. Acquisitions, joint ventures and collaborations are increasing, and vendors are also developing modular systems, environmentally sustainable refrigerants, AI-optimized control software and water-efficient technologies. Mid-sized vendors should decide now whether to partner, specialize or exit, because the window for strategic alliances is narrowing.
Global Data Center Industry Leaders
Disclaimer: Major players sorted in no particular order.
RECENT INDUSTRY DEVELOPMENTS
GLOBAL DATA CENTER COLOCATION MARKET
View Colocation Report →TABLE OF CONTENTS FOR GLOBAL DATA CENTER INDUSTRY REPORT
GLOBAL DATA CENTER MARKET REPORT SCOPE
IT Infrastructure
- Servers
- Storage Systems
- Network Infrastructure
Electrical Infrastructure
- UPS Systems
- Generators
- Transfer Switches & Switchgears
- PDUs
- Other Electrical Infrastructure
Mechanical Infrastructure
- Cooling Systems
- Rack Cabinets
- Other Mechanical Infrastructure
Cooling Systems
- CRAC & CRAH Units
- Chiller Units
- Cooling Towers, Condensers & Dry Coolers
- Other Cooling Units
General Construction
- Core & Shell Development
- Installation & Commissioning Services
- Engineering & Building Design
- Fire Detection & Suppression Systems
- Physical Security
- Data Center Infrastructure Management (DCIM)
Tier Standard
- Tier I & Tier II
- Tier III
- Tier IV
MARKET DEFINITION
| Term | Definition |
|---|---|
| PUE | Power Usage Effectiveness — total facility energy divided by IT equipment energy; values closer to 1.0 indicate higher efficiency. |
| Redundancy (N, N+1, 2N) | Design standards describing backup capacity for power and cooling components, ranging from no redundancy (N) to fully duplicated systems (2N). |
| CRAC / CRAH | Computer Room Air Conditioner / Air Handler — equipment used to regulate temperature and humidity in the server environment. |
| Hot Aisle / Cold Aisle | Rack layout convention that separates cool air intake from hot air exhaust to improve cooling efficiency. |
| Colocation (Retail / Wholesale) | Retail colocation serves capacity needs under roughly 250 kW; wholesale colocation serves capacity needs between 250 kW and 4 MW. |
RESEARCH METHODOLOGY
Identify Key Variables
Variables and factors are tested against historical facility-level market data through an iterative process.
Build a Market Model
Market-size estimations are built in nominal terms with a consistent average selling price across the forecast period.
Validate & Finalize
Market numbers and analyst calls are validated through an extensive primary research network across levels and functions.
Research Outputs
Syndicated reports, custom consulting assignments, and facility-level databases.
Facility-level depth
Existing and upcoming facilities tracked across Global.
Exclusive research
80% of Arizton reports are exclusive and first-to-market.
Trusted by leaders
200+ Fortune 500 companies rely on Arizton research.
24x7 availability
Continuous analyst and post-sale support.
Free customization
15–20% free customization on every license tier.
KEY QUESTIONS ANSWERED IN THE REPORT
How big is the global data center cooling market?
What is the growth rate of the global data center cooling market?
What are the key trends in the global data center cooling market?
How big is the global data center cooling market?
What are the key trends in the global data center cooling market?
Is Liquid Cooling Better Than Air Cooling for Data Centers?
Which Cooling Technology Is Best for AI Data Centers?
How Much Water Do Data Centers Use for Cooling, and Can It Be Reduced?
What Is a Good PUE for a Data Center?
Which type of cooling vendor is best placed for AI data centers?
Last Refreshed on : October 2026
