Data Center Cooling Market Growth Driven by AI Workload Density and Heat Challenges

Data Center Cooling Market Size and Forecast 2025 to 2034

The global data center cooling market size accounted for USD 72.98 billion in 2024 and is expected to exceed around USD 226.39 billion by 2034, growing at a CAGR of 11.99% from 2025 to 2034.

Data Center Cooling Market Key Takeaways

• North America led the global market with the highest market share of 51% in 2024.
• By product, the air conditioners segment has captured around 31% of the overall revenue in 2024.
• The precision air conditioners segment is growing at a CAGR of 18.2% over the forecast period.
• By containment, the containment segment has captured a sizeable revenue share of around 51% in 2024.
• The retail segment is poised to grow at a CAGR of 15.3% from 2025 to 2034.
• The telecom segment is projected to reach at a CAGR of 18.7% from 2025 to 2034.

How has AI benefited the Market?

The artificial intelligence is transforming the data center cooling market by improving energy efficiency, enabling predictive maintenance, and optimizing resource use. Using sensor data, the AI algorithms adjust cooling systems interactively to avoid energy wastage and curb operational costs. Predictive maintenance infers operational faulty conditions early enough to steer clear of downtime and cost in repair. AI, on the other hand, distributes workloads across servers to avoid hotspots and defend cooling from actual requirements. All these increase uptime and reduce latency, thus improving reliability and energy efficiency, and making the data center an affordable environment.

U.S. Data Center Cooling Market Size and Growth 2025 to 2034

The U.S. data center cooling market size was exhibited at USD 22.71 billion in 2024 and is projected to be worth around USD 73.89 billion by 2034, growing at a CAGR of 12.52% from 2025 to 2034.

North America led the global data center cooling market in 2024 and predicted to retain the same trend over the years to come owing to the largest market dedicated for the technology oriented solutions. Further, the region has also witnessed a healthy growth in the global economy, particularly for the development and implementation of new and upcoming technologies. Moreover, with presence of significant companies for example Amazon Inc., Facebook, and Google Inc.contribute positively towards the growth of the region.

On the other hand, the Asia Pacific anticipated to gain prominence during the upcoming period because of significant growth opportunity for the application of telecom sector. This is mainly due to the significant rise in the number of service providers that offer external IT infrastructure services as well as manage and operate critical business applications and information.

Data Center Cooling Market Growth Factors

Rising need for energy-efficient data centers, significant spending by colocation service and managed service providers, and rising construction of hyperscale data centers are the prime factors expected to propel the market growth. In addition, emergence of big data, cloud technology, and Internet of Things (IoT) has permitted organizations to spend in new data centers to maintain the business continuity. This is the other important factor likely to boost the market size over the upcoming years.

Additionally, increasing demand for security, operational efficiency, improved mobility, and bandwidth anticipated to prosper the industry development. Software-based data centers contribute to the market growth by offering improved automation level. Advent of IoT and connected technology has propelled various businesses to shift towards digital transformation that has again surged the necessity for an advanced data center ecosystem that ensures scalability, quick deployment, security, flexibility, and availability. This shift in business trend is paving way for the advancement and development of innovative solutions that is highly agile, cost-effective, and software-defined. The above mentioned factors projected to impel the market growth over the forthcoming years.

• Feverish demand for energy-efficient data centers is causing investments to be channeled toward advanced cooling technologies.
• Increasing spends by colocation and managed service providers favor the development of data center infrastructure.
• Rapid deployment of hyperscale data centers introduced a great demand for cooling solutions.
• Rising focus on security, operational efficiency, mobility, and bandwidth drives software-defined and automated cooling systems.
• Digital transformation creates a need for scalable, flexible, cost-effective data center ecosystems to foster innovations in cooling technologies.

Market Scope

Market Dynamics

Drivers

Growth of Cloud Computing and Big Data

It is said that data centers exploit the rapid expansion of cloud computing and big data analytics. To put it more technically, they require a big data center with high-density server racks. Such a data center generates lots of heat; therefore, it must be properly cooled to maintain its efficacy and to avoid damage to the equipment from overheating. The limitation of having scalable and efficient cloud infrastructure still sees investments in pioneering cooling technologies to support the worldwide growth of digital services and data processing capability.

Restraint

Technical Challenges

New cooling techniques are very difficult to set up in existing data centers. An existing outdated facility will either need to be technically upgraded or redesigned to accommodate such systems. These technical roadblocks might dissuade operators from adopting innovative cooling methods promptly, stunting the market growth and acting as a barrier to realizing enhanced energy efficiency and cooling performance of aging data center infrastructures, being a costly, complex, and lengthy process.

Opportunity

Liquid Cooling Technologies

Liquid cooling is gaining momentum as a more promising technology to be installed for the realization of high-density data centers because of its fast heat dissipation and energy efficiency. It deals with thermal loads so well that traditional air-cooling lacks, thus allowing for better server performance but also less energy to run it. As liquid cooling approaches more powerful computing support in these data centers, it harbors a huge potential for growth due to a higher level of sustainability and operational efficiency.

Product Insights

Air conditioners segment dominated the global data center cooling market and accounted for more than 30% of the market share in 2023 as well as projected to exhibit prominent growth over the upcoming years. Densely packed racks tend to generate huge amounts of heat while storing and analyzing data for effective decision-making. Because of this reason, air conditioners help organizations to maintain a required temperature level along with ensuring the proper functioning of systems.

Additionally, air conditioner is a type of heat exchanger that maintains an adequate level of room temperature in a sensitive IT environment. In the meantime, the precision air conditioners register the fastest growth rate during the analysis period. Technological advancements along with the introduction of energy-efficient units estimated to uplift the demand for precision air conditioners. Moreover, they provide numerous benefits that include a demonstration of better air distribution, precise humidity control, continuous operation, along with automatic control of different AC loads for effective cooling.

Application Insights

Based on application, retail segment is estimated to exhibit a CAGR of more than 13% over the analysis period. The significant growth of the segment is attributed to the extensive application of social media, smartphones, Image Processing Verification Tools (IPVT), and tablet computers that in turn spur the volume of data.

Moreover, the telecom segment occupied the largest value share in 2023 and is anticipated to witness the fastest growth rate over the upcoming years. Rapid expansion of IT & telecom industry across the world is expected to propel the growth of the data center cooling market. Additionally, significant development in the telecommunication infrastructures fuels the need for equivalent storage facilities that are projected to impel the demand for data center cooling solutions.

Data Center Cooling Market Companies

• Asetek
• Air Enterprises
• Climaveneta Climate Technologies (P) Ltd.
• Fujitsu Limited
• Coolcentric
• Hitachi Ltd.
• Rittal GmbH & Co. KG
• Netmagic Solutions
• STULZ GMBH
• Telx Holdings, Inc. (Digital Realty Trust, Inc.)
• Schneider Electric
• Vertiv Co.

Recent Updates on Data Center Cooling Market- 2025

Schnider Electric and Nvidia Unveil AI-optimized Cooling Reference Designs

• In December 2024, Schneider Electric teamed up with Nvidia to roll out AI-ready data center reference architectures. These designs support high-density liquid cooling at the rack level, cutting energy use and speeding up deployment. Their collaboration extends sustainable infrastructure solutions to hyperscale clients.

AWS Debuts In-Row Heat Exchanger to Support Nvidia GPU Clusters

• In July 2025, AWS introduced a proprietary liquid cooling system, IRHX co co-designed with Nvidia, to cool GPU racks without major facility changes. It fits within standard rack footprints and enables smooth scaling of AI workloads in legacy data centers. AWS may extend this tech to its Graviton chipsets as their heat demands rise.

The Industry Shifts Toward Liquid and Immersion Cooling Amid Rising AI Heat Loads

• In July 2025, traditional air and evaporative cooling systems are increasingly falling short, prompting providers like Liquid Stack, Caddis Cloud, and Databank to adopt immersion and direct chip techniques. While the pace of adoption varies globally, the physics of AI workloads is pushing cooling closer to silicon.

Recent Developments

• On 13 May 2025, Samsung Electronics announced acquisition of Flak Group to expand HVAC offering in data center Samsung entered a $1.5 billion agreement to acquire Flak Group, a Germany based HVAC leader. The move strengthens Samsung position in climate. (Source: https://www.reuters.com)
• On 21 March 2025. Vertiv rolled out a complete services suite for liquid cooling, including its Liebert XDU1350 system for CDU (cooling distribution units). The services target hyperscale and AI-focused data centers transitioning to liquid-based thermal management. (Source: https://www.vertiv.com)

Segments Covered in the Report

By Containment

• Raised Floor without Containment
• Raised Floor with Containment
  • Cold Aisle Containment (CAC)
  • Hot Aisle Containment (HAC)

By Structure

• Row-Based Cooling
• Rack-Based Cooling
• Room-Based Cooling

By Product

• Precision Air Conditioners
• Air Conditioners
• Air Handling Units
• Chillers
• Others

By Application

• IT
• Telecom
• Healthcare
• Retail
• Energy
• BFSI
• Others

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa