Data Center Cooling System Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Cooling Strategies (Free Cooling, Air Containment and Closed Loop Cooling), By End-Use Type (Tier-1, Tier-2, Tier-3, and Tier-4), By Service (Installation/Deployment Services, Maintenance Services & Monitoring Software), By End User Industry (Oil & Gas energy, BFSI, Healthcare, Government & Defense, IT & Telecom, Others), By Region 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 17.03 Billion
CAGR (2026-2031)	13.51%
Fastest Growing Segment	IT & Telecom
Largest Market	North America
Market Size (2031)	USD 36.43 Billion

Market Overview

The Global Data Center Cooling System Market will grow from USD 17.03 Billion in 2025 to USD 36.43 Billion by 2031 at a 13.51% CAGR. The Global Data Center Cooling System Market encompasses specialized thermal management infrastructure, ranging from precision air conditioning to liquid immersion units, designed to regulate temperature and humidity for critical IT equipment. The market is fundamentally supported by the exponential rise in data creation and the intensifying computational power required by artificial intelligence, which drives rack power densities significantly higher. These factors necessitate enhanced cooling capacities to prevent hardware failure and ensure business continuity, acting as the primary catalysts for industry investment.

One significant challenge impeding rapid market expansion is the difficulty of upgrading legacy facilities to meet modern efficiency standards and thermal loads without incurring prohibitive capital expenditures. This infrastructure gap presents a major operational obstacle for many enterprises as they attempt to scale operations. According to AFCOM, in 2024, 38% of data center professionals reported that their current cooling solutions were inadequate for meeting their evolving facility needs. This statistic highlights the persistent struggle operators face in balancing rising performance demands with the capabilities of existing thermal management systems.

Key Market Drivers

Rising power densities from artificial intelligence and high-performance computing are fundamentally reshaping thermal management requirements. As operators deploy clusters of high-density Graphics Processing Units for generative AI workloads, the thermal output per rack has escalated beyond the effective capabilities of legacy air-based systems. This thermal intensification mandates the deployment of specialized infrastructure capable of managing extreme localized heat loads to maintain hardware reliability. According to Schneider Electric, June 2024, in the 'AI Disruption: Challenges and Opportunities for Data Center Operators' report, the rapid integration of AI accelerators is driving rack power densities up to 100 kilowatts in specialized high-performance zones, necessitating a fundamental architectural shift in cooling design.

The shift toward advanced liquid and immersion cooling technologies is accelerating as a direct response to these density challenges and the imperative for energy efficiency. Facilities are increasingly adopting direct-to-chip or immersion methods that significantly lower Power Usage Effectiveness ratios compared to traditional air cooling. According to Supermicro, June 2024, in the press release 'Supermicro Expands Silicon Valley Manufacturing Campus', the company projects that up to 30% of new data center deployments will utilize liquid cooling solutions in the coming years. This technological transition is critical because, according to the International Energy Agency, January 2024, in the 'Electricity 2024' report, global electricity consumption from data centers and AI sectors is projected to potentially double to 1,000 terawatt-hours by 2026.

Download Free Sample Report

Key Market Challenges

The primary challenge hampering the Global Data Center Cooling System Market is the logistical and financial burden associated with retrofitting legacy facilities to accommodate modern thermal loads. Older data centers were typically constructed with infrastructure specifications designed for lower rack densities, making the integration of high-performance cooling systems structurally difficult. This incompatibility creates a bottleneck where operators are forced to defer necessary upgrades to avoid the risks of prolonged downtime and the substantial capital expenditures required to overhaul active environments. Consequently, the market experiences a deceleration in the adoption of advanced cooling units, as enterprises struggle to justify the heavy investment needed to modernize aging operational footprints.

This resistance to infrastructure investment is substantiated by recent industry data highlighting the barriers to technology implementation. According to AFCOM, in 2025, 47% of data center operators cited integration complexity as a primary obstacle to adopting advanced liquid cooling solutions, while 41% noted significant concerns regarding the associated costs. This statistic demonstrates that market growth is not restricted by a lack of demand for thermal management, but rather by the practical and economic hurdles of modifying established facilities to support these critical systems.

Key Market Trends

The implementation of waste heat recovery and reuse systems is rapidly emerging as a critical strategy to integrate data center infrastructure with local energy ecosystems. Rather than venting thermal byproducts into the atmosphere, operators are increasingly deploying heat exchangers and liquid loops to capture high-grade heat for district heating networks and industrial applications. This transition is driven by stringent environmental regulations and the need to improve overall facility efficiency metrics beyond standard Power Usage Effectiveness (PUE) calculations. According to Equinix, December 2025, in the press release 'Equinix Named a Leader in the IDC MarketScape', the company reported the export of 14.5 gigawatt-hours of residual heat from its operations in 2024, representing a 245% increase compared to the previous year. This establishes heat reuse as a tangible revenue stream and sustainability lever for modern facilities.

Simultaneously, the standardization of higher operating temperatures for energy efficiency is reshaping cooling architecture designs. To reduce the energy intensity of mechanical chillers, manufacturers are optimizing systems to function with elevated coolant supply temperatures, which extends the hours available for free cooling and improves heat rejection efficiency. This approach aligns with modern hardware specifications that tolerate warmer thermal envelopes, allowing for significant reductions in compression energy. According to Dell Technologies, May 2025, in the article 'Dell Technologies Fuels Enterprise AI Innovation', the company highlighted that its new rear door heat exchanger solutions now operate with water temperatures between 32 and 36 degrees Celsius, eliminating the reliance on energy-intensive chilled water loops for high-density deployments. This trend signals a fundamental operational shift toward warmer, more resilient cooling environments.

Segmental Insights

The IT and Telecom sector is positioned as the fastest-growing segment in the Global Data Center Cooling System Market, driven by the rapid expansion of digital infrastructure. The extensive deployment of 5G networks and cloud services has increased server rack density, creating a critical need for effective thermal management to prevent overheating. Furthermore, stringent environmental regulations regarding energy efficiency compel telecommunication providers to upgrade their facilities with sustainable cooling solutions. This continuous demand for reliable data processing and infrastructure modernization directly accelerates the adoption of cooling systems within this vertical.

Regional Insights

North America holds the leading position in the Global Data Center Cooling System Market, primarily due to the extensive presence of hyperscale data centers and cloud service providers in the United States. This dominance is supported by a strong regional focus on sustainability and energy efficiency. Guidelines established by the American Society of Heating, Refrigerating and Air-Conditioning Engineers influence the adoption of optimized thermal management solutions to reduce power consumption. Additionally, substantial investment in IT infrastructure and high-performance computing ensures a continuous demand for effective cooling technologies, securing the region's status as a primary market hub.

Recent Developments

• In December 2025, Schneider Electric, through its subsidiary Motivair, launched two new Coolant Distribution Units designed to manage the extreme heat generated by high-performance computing and artificial intelligence applications. The newly introduced models, MCDU-45 and MCDU-55, were engineered for installation in utility corridors to maximize white space within data centers. These units featured advanced flow control and adaptive load balancing to ensure optimal thermal performance for density-intensive environments. This product launch marked the first major release since the acquisition, reinforcing the company's commitment to providing scalable, end-to-end liquid cooling solutions for hyperscale and colocation facilities facing rising power densities.
• In October 2024, Vertiv announced a significant collaboration with NVIDIA to co-develop a complete reference architecture for liquid cooling in AI-focused data centers. This strategic partnership aimed to address the intense thermal demands of high-density computing by introducing a hybrid liquid- and air-cooling infrastructure capable of supporting up to 132 kW per rack. The jointly designed solution was specifically optimized for the GB200 NVL72 platform, enabling substantially faster deployment and improved energy efficiency for critical AI workloads. The initiative underscored the critical role of advanced thermal management infrastructure in supporting the rapid scaling of next-generation accelerated computing factories.
• In October 2024, CoolIT Systems expanded its product portfolio by introducing a new range of liquid cooling solutions tailored for the NVIDIA Blackwell AI platform. The strategic announcement included high-performance coolant distribution units, such as the AHx240 and AHx180, as well as direct-to-chip server modules designed to handle the rigorous thermal requirements of next-generation AI processors. This development was accompanied by a significant increase in manufacturing capacity to support large-scale deployments globally. The company's strategic alignment with major chip manufacturers highlighted the growing necessity of direct liquid cooling technology in maintaining operational stability and efficiency for dense computing clusters.
• In September 2024, Munters and ZutaCore formed a strategic alliance to deliver a waterless, two-phase liquid cooling solution for modern data centers. This collaboration integrated Munters' closed-loop air cooling systems with ZutaCore's direct-on-chip technology to efficiently manage the massive heat output from high-density AI accelerators. The combined solution was designed to completely eliminate the risk of water leakage while significantly reducing power consumption and operational costs for facility operators. By leveraging their respective strengths in air and liquid thermal management, the companies aimed to provide a sustainable and scalable architecture capable of cooling hundreds of megawatts of compute power.

Key Market Players

• Siemon Company
• Asetek, Inc.
• NTT Limited
• Schneider Electric SE
• STULZ GmbH
• Rittal GmbH & Co. KG
• Cisco Systems Inc.
• Emerson Network Power
• Fujitsu Limited
• Vertiv Group Corp.

By Cooling Strategies	By End-Use Type	By Service	By End User Industry	By Region
Free Cooling Air Containment and Closed Loop Cooling	Tier-1 Tier-2 Tier-3 and Tier-4	Installation/Deployment Services Maintenance Services & Monitoring Software	Oil & Gas energy BFSI Healthcare Government & Defense IT & Telecom Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Data Center Cooling System Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Data Center Cooling System Market, By Cooling Strategies:

• Free Cooling
• Air Containment and Closed Loop Cooling

• Data Center Cooling System Market, By End-Use Type:

• Tier-1
• Tier-2
• Tier-3
• and Tier-4

• Data Center Cooling System Market, By Service:

• Installation/Deployment Services
• Maintenance Services & Monitoring Software

• Data Center Cooling System Market, By End User Industry:

• Oil & Gas energy
• BFSI
• Healthcare
• Government & Defense
• IT & Telecom
• Others

• Data Center Cooling System Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE