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 components are most crucial for thermal management in data centers, ensuring IT equipment in facilities operates within optimal temperatures. As data center operators deploy power-intensive racks to support artificial intelligence (AI), machine learning (ML), high-performance computing (HPC), and cloud workloads, investments in advanced cooling infrastructure are accelerating worldwide.
In 2025, the global data center cooling market has increased by around 63.89% compared to 2024 in terms of cooling infrastructure investments. Along with conventional air-based cooling equipment like CRAC and CRAH units, companies are investing in high-efficiency chillers, cooling towers, dry coolers, coolant distribution units, rear-door heat exchangers, intelligent cooling control equipment, and heat rejection technologies to improve operational efficiency in data centers while reducing energy consumption.
As hyperscale cloud companies and colocation operators are increasingly focusing on sustainability, the firms aim to lower Power Usage Effectiveness and minimize water consumption in their facilities. Therefore, data center operators are modernizing mechanical infrastructure in their facilities to deploy future-ready cooling solutions. Modern data centers are being designed with modular, scalable, and hybrid cooling architecture to support high-density racks delivering rack power densities of over 100 kW per rack.
In 2025, North America led the global data center cooling market in terms of cooling infrastructure investments, contributing around 60% of the market’s cooling investment share, followed by APAC, Europe, and other regions. Data center operators are also deploying automated cooling controls, advanced monitoring platforms, digital twins, and predictive maintenance technologies to optimize cooling performance in data centers, while minimizing operational costs.
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. The cooling system segment accounted for the largest market share of around 77% in 2025, highlighting strong demand for thermal management solutions across data centers. Cooling systems help manage heat generated by IT infrastructure through air- and water-based technologies. Companies supplying Computer Room Air Conditioners (CRAC), Computer Room Air Handlers (CRAH), chillers, cooling towers, dry coolers, economizers, and evaporative coolers should look into this segment to capitalize on the continued development of data center infrastructure across Southeast Asia.
With rising power demand and increasing server rack densities, data center operators are exploring liquid cooling solutions to improve thermal management efficiency. Liquid cooling uses the superior heat-transfer capabilities of water or other fluids to manage heat from high-density server racks, creating opportunities for companies offering advanced cooling technologies and energy-efficient solutions.
Datacom's Abel data center in Wellington, New Zealand, features a hybrid cooling system that supports both air cooling and liquid cooling. This development highlights the growing opportunity for cooling technology providers to offer flexible solutions that address changing data center requirements and 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. 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.
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.
COOLING TECHNIQUE
Based on cooling techniques, the liquid-based cooling segment is projected to grow at the fastest CAGR of 18.94% during the forecast period, creating significant opportunities for companies supplying advanced data center cooling solutions. Liquid cooling is increasingly used in data centers, particularly high-performance computing (HPC) facilities, where conventional air cooling may struggle to manage heat from high-density IT infrastructure. Companies should look into this segment to strengthen their offerings in efficient thermal management technologies that support increasing server densities and computing workloads.
Liquid cooling includes water-based cooling, immersion cooling, and direct liquid cooling. Rear-door heat exchangers also offer opportunities for cooling technology providers, as they can be installed at individual rack levels to remove heat generated by servers. These systems use server fans to push warm air through heat exchangers, helping operators manage rack temperatures and improve cooling efficiency. Vendors should consider offering rack-level cooling solutions to address the requirements of data centers expanding their high-density infrastructure.
The liquid-based cooling segment also includes chilled-water systems, direct liquid cooling, and immersion cooling technologies, along with refrigerant- and glycol-based cooling systems. As data center operators seek effective ways to manage rising heat loads, manufacturers and technology providers should explore these solutions to address evolving cooling requirements across new and existing facilities.
GEOGRAPHY ANALYSIS
North America
Western Europe
Nordics
Middle East
APAC
COMPETITIVE LANDSCAPE
The global data center cooling market comprises numerous HVAC manufacturers, liquid cooling companies, precision cooling specialists, and thermal management solution providers. As data center operators are shifting towards AI-driven computing, cooling vendors are expanding their portfolios by offering direct-to-chip liquid cooling, immersion cooling, coolant distribution units (CDUs), rear-door heat exchangers, dielectric fluids, AI-optimized cooling control software, along with traditional air-based cooling equipment.
The hyperscale companies and colocation operators are investing in scalable and sustainable cooling systems to support rack power densities of over 100 kW, while minimizing energy and water consumption in data centers. Therefore, cooling vendors are continuously innovating thermal management equipment to address the rising demands for advanced cooling infrastructure. Additionally, the surge in need for advanced liquid cooling technologies in modern data centers is likely to create substantial growth opportunities for liquid cooling solutions providers over the next five years.
The HVAC equipment manufacturers like 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 other companies are continuously expanding their portfolios with energy-efficient compressors, intelligent airflow management systems, and modular cooling systems.
The liquid cooling solutions providers like Accelsius, CoolIT Systems, Submer, Iceotope, ZutaCore, Green Revolution Cooling (GRC), Asperitas, DCX Liquid Cooling Systems, Midas Immersion Cooling, SuperX AI Technology, Wafr Technologies, and other companies are increasingly collaborating with server manufacturers, semiconductor companies, hyperscale firms, and colocation service providers to manufacture advanced liquid cooling technologies to support next-generation AI data centers.
Thermal management equipment manufacturers like Alfa Laval, Baltimore Aircoil Company, EVAPCO, Güntner, Danfoss, Wakefield Thermal, Dew Point Systems, and others are introducing energy-efficient thermal management equipment to enhance heat rejection and improve coolant circulation to enhance overall cooling mechanisms in data centers.
Modern data centers require intelligent thermal management systems to monitor environmental conditions in data halls, optimize airflow, and automate cooling operations. Companies including Siemens, Honeywell, Delta Electronics, Hitachi Energy, Degree Controls, Legrand, nVent, Austin Hughes Electronics, Cooler Master, CITEC International, and other companies are deploying monitoring systems, intelligent cooling controllers, and environmental monitoring equipment to enhance cooling efficiency in modern data centers.
The rising demand for immersion cooling techniques in AI-ready data centers is creating significant growth opportunities for manufacturers of dielectric fluids, coolants, lubricants, and heat transfer fluids. The immersion cooling solutions providers like Engineered Fluids, Dow, The Chemours Company, The Lubrizol Corporation, Castrol, and others are investing to develop next-generation dielectric fluids that improve IT equipment lifespan and sustainability in data centers.
Traditional HVAC manufacturers are expanding their portfolio with liquid cooling solutions and intelligent thermal management equipment; liquid cooling companies are partnering with cloud providers and server OEMs to develop innovative cooling systems to support AI workloads in modern data centers. Strategic acquisitions, joint ventures, and collaborations are increasing as cooling companies aim to strengthen their market position, and the vendors are also focusing to manufacture modular cooling systems, environmentally sustainable refrigerants, AI-optimized cooling control software, and water-efficient cooling technologies to support conventional workloads and AI and high-performance computing workloads.
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.
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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?
Last Refreshed on : October 2026
