U.S. Data Center Cooling Market Size & Share, Trends, Growth Outlook (2026–2031)

U.S. DATA CENTER COOLING MARKET SIZE & SHARE

The U.S. data center cooling market size witnessed investments of USD 16.03 billion in 2025 and will witness investments of USD 29.43 billion by 2031, growing at a CAGR of 10.66% during the forecast period. The U.S. data center cooling market benefits from the country’s well-established digital infrastructure and extensive base of hyperscale, colocation, and enterprise data centers. Ongoing capacity additions, alongside the increasing deployment of AI and high-performance computing (HPC) workloads, are driving higher rack densities and more demanding thermal management requirements.

This is creating greater demand for conventional air-based and chilled-water cooling systems, as well as advanced liquid-cooling technologies. Additionally, the growing focus on energy efficiency and water optimization is encouraging investments in innovative cooling solutions. The market is expected to grow at a CAGR of 10.66%, supported by the increasing need for efficient and scalable cooling infrastructure to accommodate evolving data center requirements.

Sustainability considerations are playing an increasingly important role in data center cooling strategies across the U.S., as operators focus on limiting the energy and water consumption associated with expanding computing infrastructure. The adoption of energy-efficient cooling technologies and optimized thermal management systems is helping reduce cooling-related power requirements and improve overall facility efficiency.

For instance, Google’s data centers in The Dalles required only 6%–10% additional energy for cooling and power distribution in Q4 2025, compared with the industry average of 54%. Similarly, Equinix invested $36 million in advanced cooling technologies, intelligent monitoring, and optimized facility design in 2025, contributing to a 5% improvement in its global average PUE.

U.S. DATA CENTER COOLING MARKET INSIGHTS BY INVESTMENT

1. AI & Hyperscale Demand: Rising AI, HPC, and hyperscale investments are increasing rack densities and demand for advanced cooling systems.
2. Key Investment Hub: Northern Virginia continues to attract hyperscale and colocation investments, driving demand for chillers, CRAH/CRAC systems, cooling towers, and liquid cooling.
3. Colocation Expansion: Growing investments in colocation facilities are creating demand for high-capacity cooling infrastructure to support hyperscalers, enterprises, and AI workloads.

RECENT DEVELOPMENTS & NEWS IN THE U.S. DATA CENTER COOLING MARKET

1. In September 2026, Digital Realty announced plans to invest approximately $300 million in its DFW45 facility at the Garland, Texas campus. The facility, spread across an area of 672,000 square feet, will provide 80MW across ten 8-MW suites, creating significant demand for high-capacity cooling systems to support the facility’s large-scale colocation and high-density computing requirements.
2. In January 2026, Equinix announced plans to invest more than $836 million in its Dallas 12 campus, comprising two four-story data center buildings totaling over 372,000 square feet. With construction extending through 2028, the expansion will increase the demand for cooling infrastructure capable of supporting growing cloud, AI, and high-density workloads in the Dallas market.
3. In January 2026, Vertiv introduced MegaMod HDX configurations for North America, combining direct-to-chip liquid cooling with air cooling. The modular system supports 50kW to over 100kW per rack and up to 10MW of cooling capacity, showing how suppliers are adapting infrastructure for rapidly increasing AI rack densities.
4. In July 2025, Accelsius deployed its NeuCool IR80 direct-to-chip, two-phase liquid cooling system at the Equinix Co-Innovation Facility in Virginia to demonstrate dielectric refrigerant-based heat removal in real-world AI workloads, enabling the higher-efficiency cooling of high-density chips through phase change heat transfer in a closed-loop system.

US DATA CENTER COOLING MARKET TRENDS

Rise in Rack Power Density

Rising AI workloads are increasing power consumption per data center rack, as GPU- and accelerator-based servers require substantially more electricity than conventional computing systems. Consequently, rack power densities are shifting from traditional levels of 10–20 kW to 40–100 kW or higher in AI-focused deployments, driving demand for high-capacity UPS systems, PDUs, busways, switchgear, and other electrical distribution infrastructure capable of supporting these increased loads.

Electrical infrastructure vendors are expanding their product portfolios to accommodate rising AI rack densities, with a growing focus on high-capacity, modular, and scalable power solutions capable of supporting rack loads exceeding 100 kW. This shift is driving the development of advanced UPS systems and power distribution architectures designed to meet the evolving power requirements of AI-driven data centers.

As existing data centers face growing thermal loads from AI and HPC workloads, operators are exploring ways to integrate liquid cooling into facilities originally designed for air-based thermal management. Hybrid architectures combining direct-to-chip liquid cooling with conventional air cooling and rear-door heat exchangers are enabling operators to accommodate higher rack densities without completely replacing existing cooling infrastructure.

Advanced Data Center Cooling Technologies

Increasing AI and HPC workloads are pushing rack densities beyond the capabilities of conventional air cooling, accelerating the adoption of direct-to-chip, two-phase liquid and immersion cooling solutions. These technologies enable efficient heat removal while supporting higher computing densities. For instance, Flex deployed its SmartSense 6U liquid-to-liquid Cooling Distribution Unit (CDU), capable of supporting cooling loads of up to 300kW, at Equinix's Co-Innovation Facility in Virginia. Similarly, Accelsius deployed its NeuCool IR80 two-phase direct-to-chip cooling system at the facility in July 2025.

Manufacturers are developing rear-door heat exchangers, advanced cold plates and integrated liquid-cooling platforms to manage concentrated heat from high-density AI servers. These solutions improve heat removal while enabling higher rack densities within existing facilities. For instance, Aligned Data Centers' DeltaFlow platform supports up to 300kW per rack and is compatible with direct-to-chip, rear-door heat exchanger, and immersion cooling configurations. In April 2026, OptiCool Technologies partnered with Belden to integrate rear-door heat exchangers into rack and cabinet systems.

Operators are adopting closed-loop liquid cooling, immersion cooling, and free-cooling technologies to reduce freshwater consumption and cooling-related energy requirements. For instance, Meta's AI-optimized data center in Tulsa, Oklahoma, announced in April 2026, will use a closed-loop liquid-cooling system expected to operate with zero water consumption for most of the year. Similarly, CENTRA's RNO2 facility in Reno, Nevada, incorporates closed-loop and free-cooling technologies to minimize power and water consumption.

US DATA CENTER COOLING MARKET DRIVERS

AI and HPC Expansion Driving Cooling Demand

The increasing deployment of AI processors and high-performance computing systems is generating higher heat loads, driving hyperscalers to adopt direct-to-chip liquid cooling, Cooling Distribution Units (CDUs), and advanced heat exchangers. For instance, Microsoft deployed NVIDIA GB300 NVL72 systems on Azure, with rack power densities reaching approximately 136kW, supported by direct-to-chip liquid cooling and custom heat exchanger units (HXUs). Similarly, Google’s seventh-generation Ironwood TPU uses liquid cooling to support up to 9,216 chips across nearly 10MW of computing capacity.

Large-scale investments by hyperscalers in AI-ready data center campuses are creating additional requirements for high-capacity and energy-efficient cooling infrastructure. For instance, in September 2026, Meta announced an expansion of its Eagle Mountain campus in Utah, incorporating closed-loop liquid cooling and dry cooling to eliminate operational water use for cooling.

Sustainability and Environmental Mandates

Growing regulatory and sustainability pressures around Power Usage Effectiveness (PUE), energy consumption, and carbon emissions are encouraging operators to adopt high-efficiency chillers, free-air cooling, liquid cooling, and optimized airflow management. For instance, Cologix is improving water efficiency across its data center portfolio, reducing its portfolio-wide WUE to 0.157 L/kWh in 2025, a 32% decline since 2023. The company is expanding advanced liquid cooling, including liquid-to-chip, liquid-to-air, and liquid-to-liquid systems, along with broadening the closed-loop water systems that recirculate water or coolant to support efficient heat removal for high-density workloads while limiting water consumption.

Increasing scrutiny of data center water consumption is driving investments in dry cooling, closed-loop systems, and water-efficient thermal management solutions. For instance, Aligned Data Centers' patented Delta³ cooling technology targets waterless cooling designs for new facilities, with PUE thresholds of ≤1.35 for water-based cooling and ≤1.45 for water-free cooling.

US DATA CENTER COOLING MARKET RESTRAINTS

High Capital Costs for Advanced Cooling Systems

Advanced cooling technologies such as direct-to-chip and immersion cooling require specialized equipment, including CDUs, pumps, piping networks, heat exchangers, and dielectric fluids. Liquid-cooling retrofits are estimated to cost approximately $2 million per MW, while immersion cooling tanks can cost $30,000–$50,000 per rack equivalent, increasing the initial capital requirements for operators.

Many existing U.S. data centers were designed for conventional air cooling and require substantial infrastructure modifications to accommodate liquid-cooling systems. Retrofitting involves installing coolant distribution networks, leak detection systems, and additional heat-rejection equipment, increasing installation costs and operational complexity. These requirements can particularly constrain smaller colocation and enterprise operators.

The lack of standardized liquid-cooling designs and higher equipment and maintenance costs can delay adoption among cost-sensitive operators. Uptime Institute's 2025 survey found that 39% of respondents identified limited standardization as a barrier to direct liquid cooling, while 38% cited cost. Additionally, the time required to recover initial investments through energy savings can discourage large-scale deployment.

Increasing Water Consumption by Data Centers

Growing data center capacity and AI-driven cooling requirements are placing additional pressure on local water resources, particularly in drought-prone regions. According to the IEA, a typical 100MW data center in the U.S. consumes approximately 2 million liters of water daily, intensifying concerns around water availability and community impact. In September 2026, California introduced seven bills requiring data centers to disclose water consumption, demonstrate water efficiency, and provide drought-management plans, increasing the emphasis on water-efficient cooling infrastructure.

Growing scrutiny of water consumption is pushing operators towards dry cooling, closed-loop systems, direct-to-chip cooling and immersion cooling to reduce dependence on freshwater resources. However, transitioning to these technologies involves additional capital expenditure and infrastructure requirements. For instance, next-generation cooling approaches, including cold plates and single- and two-phase immersion cooling, can reduce lifecycle water consumption by approximately 31%–52% compared with conventional air cooling, supporting more sustainable data center operations.

U.S. DATA CENTER COOLING MARKET SEGMENTATION INSIGHTS

INSIGHTS BY MECHANICAL INFRASTRUCTURE

The U.S. data center mechanical infrastructure market by mechanical infrastructure is segmented into cooling systems and other mechanical infrastructure. Cooling systems accounted for the largest market share of over 72% in 2025. Sustainability and energy efficiency are becoming key drivers of cooling innovation, with data centers increasingly adopting liquid cooling, closed-loop water systems, and free-cooling technologies to reduce power consumption, water usage, and operational costs while supporting high-density AI workloads. This creates opportunities for cooling equipment manufacturers and suppliers to offer energy-efficient solutions to data center operators.

Traditional air cooling remains widely used across data centers, particularly for low- and medium-density workloads. However, rising rack power densities are encouraging operators to improve airflow management, deploy higher-efficiency CRAH/CRAC systems, and adopt free-air or economizer cooling to reduce energy consumption. Suppliers can target this demand with advanced air-cooling systems and airflow management solutions.

The rapid growth of AI and HPC is further increasing demand for liquid cooling, which can remove more heat from high-density servers than conventional air cooling. Direct-to-chip, rear-door heat exchangers, and immersion cooling are gaining attention as rack densities increase. These developments create opportunities for liquid cooling technology providers to expand their offerings and serve data centers with high-performance computing requirements.

INSIGHTS BY COOLING SYSTEMS

Based on the cooling systems, the chiller units accounted for the largest U.S. data center cooling market share in 2025. The DAL3 data center of Cologix in Dallas uses chilled-water in-row cooling to provide targeted cooling close to high-density IT equipment. The facility is supported by N+1 chiller redundancy, dedicated controls, and data center branches connected to in-row coolers. These installations create opportunities for chiller manufacturers and cooling system suppliers to serve data centers with high-density cooling requirements.

The Novva Data Centers facility in Reno, Nevada, uses air-cooled chillers that eliminate water evaporation, supporting sustainable and water-efficient cooling operations in a drought-prone region. Such projects highlight the demand for water-efficient chiller solutions and create opportunities for suppliers to target data centers focused on reducing water consumption and improving cooling efficiency.

INSIGHTS BY COOLING TECHNIQUE

Based on the cooling technique, the liquid-based cooling technique shows the highest growth, with a CAGR of 15.98% during the forecast period. Liquid-based cooling techniques in data centers include chilled water cooling, direct liquid cooling, and immersion cooling. The growing adoption of these systems creates opportunities for cooling technology providers to serve data centers with increasing thermal management requirements.

Liquid cooling systems are increasingly being integrated with closed-loop chilled water architectures to improve heat transfer efficiency while minimizing water consumption. This creates opportunities for suppliers to offer cooling solutions that support energy efficiency and high-density workloads.

Modern data center campuses are also adopting liquid-ready infrastructure to support AI-driven workloads. For example, Edged's PHX01-1 data center facility in Phoenix, Arizona, uses liquid-ready infrastructure to support workloads of up to 200 kW per rack, with plug-and-play expansion capability. Such developments highlight the growing demand for liquid cooling solutions and create opportunities for suppliers to target high-density data center projects.

INSIGHTS BY LIQUID COOLING TECHNIQUES

Based on the liquid cooling techniques, the water-based cooling technique dominated and held the largest share of the U.S. data center cooling market in 2025. Among these technologies, water-based cooling attracted the highest investment, reflecting its established role in supporting high-capacity thermal management. This creates opportunities for cooling equipment manufacturers and suppliers to target data center operators with water-based cooling solutions.

Meanwhile, growing AI workloads and increasing rack power densities are expected to accelerate the adoption of direct-to-chip and immersion cooling solutions to manage higher heat loads. These developments create opportunities for cooling technology providers to expand their product offerings and serve data centers with increasing thermal management requirements.

U.S. DATA CENTER COOLING MARKET VENDOR LANDSCAPE

The U.S. data center cooling market is characterized by the presence of major cooling equipment manufacturers and thermal management solution providers, including Airedale by Modine, Baltimore Aircoil Company (BAC), Carrier, Condair, Daikin, Danfoss, Johnson Controls, LG Electronics, Mitsubishi Electric, Munters, Schneider Electric, SPX Technologies, STULZ, Trane Technologies, Vertiv, and many more. These companies offer a broad range of solutions, including CRAC and CRAH units, chillers, cooling towers, condensers, dry coolers, direct-to-chip cooling systems, liquid immersion cooling, and other thermal management technologies. Growing investments in hyperscale campuses, AI-focused data centers and colocation facilities are increasing demand for high-capacity and energy-efficient cooling solutions, as operators seek to manage rising rack densities, improve thermal performance and optimize energy and water consumption across U.S. facilities.