Data Center Liquid Cooling Market Size, Share, Growth, and Industry Analysis, By Type (Single Phase Cooling, Two Phase Cooling), By Application (Small and Medium-Sized Data Centers, Enterprise Data Centers, Large Data Centers) and Regional Forecast to 2035

DATA CENTER LIQUID COOLING MARKET OVERVIEW

The global data center liquid cooling market size was USD 2506.16 million in 2026 and is projected to touch USD 11541.51 million by 2035, exhibiting a CAGR of 16.5% during the forecast period.

With the rise of thermal management issues in high-profile areas like HPC, AI, ML, and cloud infrastructure, the data center liquid cooling market continues to be a key solution. Conventional air cooling businesses are now experiencing great pressure to cool the huge thermal loads contributed by contemporary, power hungry servers. Air based solutions to cooling are frequently inefficient in managing the heat produced by today’s highly concentric and high watt servers. Modern air-cooling systems are no longer effective to disperse Operators are now increasingly embracing liquid cooling technologies that provide superior heat management, huge energy savings as well as optimised performance of the systems. Immersion cooling is, therefore, emerging as a critical solution. This strategy requires hermetically sealing IT infrastructure, including entire servers, in thermally conductive non-conductive fluids that will interact safely with energized electronic equipment. Heat arising from the hardware is immediately absorbed by the liquid and circulated to the external heat exchangers producing extremely efficient thermal management. This approach dispenses with the use of energy-intensive air-cooling elements such as server fans, CRAC units, air compressors, ducting, and dehumidifiers. By installing minimal-energy pumps and dry coolers instead of typical air-cooling equipment, the circulation of coolant experiences greatly improved efficiency, with significant reductions in power needs. Even immersion cooling can enhance better power usage effectiveness (PUE), one of the primary energy efficiency metrics in data centers. By reducing operational costs, maintaining consistent performance, and enabling increased computing capability immersion cooling addresses the market in terms of sustainable and scalable data center solutions. Due to its long-term benefits such as enhanced performance, easy infrastructure, and lowered operational costs, liquid cooling, in particular, immersion form is becoming a major enabler of constructing efficient, high-performance data centers.

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GLOBAL CRISES IMPACTING DATA CENTER LIQUID COOLING MARKETUS TARIFF IMPACT

"The Impact of U.S. Tariffs on the Market for Data Center Liquid Cooling"

The imposition of tariffs by the us on imported technologies and parts, the significant share of chinese aspects in critical manufacturing categories, has created a major disruption in the market for data centers liquid cooling. Notably, crucial components of liquid cooling systems such as heat exchangers, pumps, tubing, and exotic fluids, flow from foreign countries, and the tariffs have increased the cost of these components. Increased costs of components caused by the tariffs may lead to increased deployment prices for liquid cooling thus impediment of adoption rates, particularly among smaller data center enterprises with limited finances. Consequently, certain clients may be exposed to increased prices, which may erode the relative advantage of liquid cooling over air equivalents. Further, volatile trade policies had caused supply chain problems which led to missed deadlines and less availability of the product. As a result, companies have increasingly paid attention to close to location production, improved supply chain resilience and sourcing material locally within the U.S in order to dampen any possible tariff effects. While short-term effects may weaken markets growth, the continuous emphasis on sustainability and high capacity computing will make customer demand sustainable. Finally, the introduction of U.S. tariffs will test the industry while at the same time encouraging the creation of new and robust data center liquid cooling solutions.

LATEST TREND

"The Emergence of AI and High Density Computing Workloads is Critical to the Formation of the Liquid Cooling for Data Centers Industry"

The rapid proliferation of adoption of Artificial Intelligence (AI) and high-performance computing has been the primary stimulus for the development of the demand for data center liquid cooling systems. With more and more AI applications being implemented, such as large language models, real-time data analysis, and deep learning, there is a continuously high demand for great computational capacity and substantial thermal. The thermal load of AI-optimized hardware, such as GPUs and advanced CPUs, within high-density arrangements is now too heavy for air cooling systems. Enhanced thermal efficiency and, hence, supporting reliability and performance for the most demanding AI and high-density environments are greatly facilitated by efficient liquid cooling methods, like direct-to-chip, immersion techniques. Using these methods, data centers are able to support higher rack power capabilities, up to and exceeding 30–50 kW with increased energy efficiency, while reducing physical footprint. More and more there is a need for reliable cooling to allow top performance, in addition to guaranteed uptime, and green operations that is contributing to the proliferation of liquid cooling in data centers. Future improvements in AI infrastructure are likely to advance the demand for liquid cooling making it a necessity for future AI-driven high-performance data centers.

DATA CENTER LIQUID COOLING MARKET SEGMENTATION

Based On Types

• Single Phase Cooling: Under this approach a liquid coolant absorbs heat without undergoing a phase change during the cooling cycle. It provides a cost-effective and easy-to-effect remedy, popular in data centers where low heat is produced.
• Two Phase Cooling: This system is based upon a phase-changing coolant that absorbs heat and turns to gas thereby facilitating better heat transfer. It yields the best results in facilities that require dealing with heavy volumes of computations and require highly sophisticated efforts to regulate heat.

Based On Applications

• Small and Medium-Sized Data Centers: With moderate cooling needs and functions of servicing regional needs, such centers frequently have at their disposal practical and scalable transmission of liquid cooling technology.
• Enterprise Data Centers: For enterprises offering internal IT services, data centers should use reliable and effective cooling solutions to guarantee the reliability and performance of the critical operations and more loads.
• Large Data Centers: Such facilities are designed to manage enormous computing workloads, hence, require strong and scalable liquid cooling systems in order to manage high rack loads and power demands effectively.

MARKET DYNAMICS

Market dynamics include driving and restraining factors, opportunities and challenges stating the market conditions.

Driving Factors

"Increasing Market Demand for High-Performance Computing (HPC) and Artificial Intelligence (AI) Workloads"

The primary reason for the Data Center Liquid Cooling Market Growth is the acceleration in the fast growing high-performance computing (HPC), AI, and machine learning (ML) applications. The performance intensity of the technologies requires high-density GPU and CPU cluster usage, which results in significant heat emission. Air cooling technologies are unable to dissipate the heat produced by modern high density systems. Higher liquid cooling technologies, like direct-to-chip and immersion, offer best dissipation ensuring reliable operation and high performance in high concentration data centers. High levels of accuracy and consistent uptime are mandatory in scientific research, finance, autonomous systems, for example: As AI and HPC are being increasingly adopted with large scales, liquid cooling, in particular, will prove to be more and more important for future proofing data centers.

"A Trend is Developing on Focusing on the Optimization, Efficiency and Increase in Sustainability in Data Centers"

With increasing energy consumption from data centers worldwide, the need is increasing for the operators to reduce the environmental impact of data centers. Regulatory mandates and corporate commitments to sustainability are driving the need to scale up energy-conserving infrastructure. The application of liquid cooling technologies significantly reduces energy costs because power-hungry air conditioning equipment CRAC units, fans, and ductwork is replaced. Immersion cooling and a direct-to-chip approach also contribute to better Power Usage Effectiveness (PUE) scores that are important for measuring efficiency. Apart from reducing operating budgets, these practices also ensure industry sustainability standards are held and help meet environmental goals. Given a greater concentration on climate responsibility among government and enterprise spheres there emerges an increased viability of liquid cooling solutions as a means for sustainable growth in data center industries.

Restraining Factor

"High Expense Levels for Starting a Liquid Cooling System and Making Required Changes to the Infrastructure Continue to be a Major Issue"

The high initial investment costs related to data center liquid cooling solutions are the main hindrance to its widespread adoption. Advancement of smart liquid cooling techniques such as immersion and two-phase systems require custom equipment, changed server setups, and adjustments to current infrastructure, as opposed to regular air-cooling technology. Such upgrades occur at a cost that is most often too high for historic data centers which have not been modelled for liquid cooling. Further, costs relating to training staff, changing new monitoring technology, and determining whether existing equipment is compatible may also become the need. Limited by these logistical and financial impediments, small and medium-sized data centers are expected to lag behind in the adoption of the technology of liquid cooling even though it promises relatively substantial long-term operational savings. The perceived challenges and risks associated with transitioning towards unknown technologies often run into delayed or reluctance, in some of the market segments.

Opportunity

"Growing Demand for Environmental Friendly Data Centers worldwide"

The increasing prominence on sustainability is opening up a huge market for liquid cooling solutions in data centers. As interest in energy use and carbon footprint in data centers continues to rise, liquid cooling will provide a means to not only increase efficiency but also improve environmental accountability. Through reduced consumption of air handling units that consume power and optimized PUE, these technologies allow for the compliance to green building standards and achievement of the goals on carbon neutrality of data center operators. In addition, waste heat recovery via liquid cooling provides an option of reusing the thermal energy for building warmth or industrial heating which in turn contributes to less environmental impact. ESG-focused companies are more likely to invest in sustainable infrastructure of which liquid cooling becomes a crucial solution. With governments putting a tighter leash on the regulatory environment and energy costs rising, there will grow an imperative need for efficient, environmentally friendly cooling, and the Data Center Liquid Cooling Market Share will prove to be an attractive arena for future growth.

Challenge

"Technical Complexity and Integration Issues"

Liquid cooling integration in existing data centers is characterised by high levels of technical complexities. The process of liquid cooling system requires specific materials such as pumps, heat exchangers and coolant containment systems that may not be suitable for the existing server infrastructure. Keeping performance leak-free and safely handling dielectric fluids adds to the existing challenges. Besides, maintenance techniques on liquid cooling systems vary considerably from those applied in conventional air-cooling arrangements which require the need for the retraining of the staff and alterations in policies of operation. Advanced control systems are required to effectively manage characteristics of coolant such as quality, flow and temperature. Operators with no internal experience also fear the prospects of availability problems and increased downtime as well as future serviceability challenges as a result of these complexities. To overcome these integration and support challenges, vendors are required to adopt robust design, provide simple guides, and provide explicit support to increase acceptance. This is what solved these challenges to make liquid cool a viable option across a variety of data centers, not only those with fat budgets or newly-constructed infrastructures.

DATA CENTER LIQUID COOLING MARKET REGIONAL INSIGHTS

• North America

The North American data center liquid cooling market will continue to lead the way alongside the continuous growth of hyperscale data centers and the strong cloud services industry, as well as early adoption of advanced cooling technologies. The foremost technology companies, such as Google, Microsoft, Amazon, and Meta are investing heavily in sustainable infrastructure in order to mitigate their carbon footprint in response to the rapidly growing number of AI and HPC workloads. Besides, rules and incentives promising the reduction of carbon footprint makes liquid cooling solutions more attractive for data center operators. The matured R&D environment and strong digital infrastructure in the area allow the adoption and incorporation of cutting-edge cooling systems, including immersion and two-phase cooling. Being catalyzed by the increased awareness of environmental concerns and pressure for cost efficiency, United States Data Center Liquid Cooling market are adopting into the liquid cooling solutions as they attempt to grow sustainably and establish a strong position in the global marketplace.

• Europe

The European market is emerging as a dominant player in data center liquid cooling brought about by stringent environmental standards, emphasis on energy efficiency and investment in digital infrastructure. With carbon neutrality on the agenda with EU climate policies, the European data-center operators are leading the efforts towards sustainable developments such as liquid-cooling systems that can bring substantial savings in terms of energy consumption and carbon emission. It is Germany, the Netherlands and the Nordic region which shine, facilitating favorable environmental conditions, abundant clean energy sources and money incentives for the development of sustainable data center infrastructure. Furthermore, the explosive growth of industries that need high performance computing, AI, and distributed computing is exacerbating the demand for optimized cooling solutions. More and more, European data center operators are interested in having liquid cooling solutions implemented while dealing with regulatory needs and performance improvements. Europe has a lot to contribute to the design of liquid cooling systems around the world because of its sustainability and next-generation innovation.

• Asia

The Asian data center liquid cooling market growth is expected to be influenced by the broad digital transformation, growing hyper-scale cloud provider expansion, and increased consumer appetite for high-grade AI services. In countries such as China, India, Japan, and Singapore, we have a significant growth in data center facilities, largely attributed to increased internet activity, the acceleration of mobile usage, and fast-paced e-commerce growth. Due to the higher power densities that must be accommodated in highly populated urban environments, the use of liquid cooling technology is being encouraged. Governmental steps towards emphasizing the green infrastructure and smart city expansion are also supporting the rising implementation of energy-efficient cooling technologies. The progress in local manufacturing, as well as the new technology in such countries as China, and Japan, leads to affordability, and development of liquid cooling systems. Given that top tech firms and prominent cloud service providers are setting up high density eco-friendly data centres across Asia, the region is set to be at the forefront, when it comes to pushing liquid cooling solutions forward.

KEY INDUSTRY PLAYERS

Template of key organizations in the data center liquid cooling space is making significant efforts to promote innovation, strategize together, and grow their presence internationally in order to address this growing demand for effective thermal management solutions. Key players in the market are Schneider Electric, Vertiv, and Dell Technologies who provide scalable and integrated liquid cooling technologies for enterprise and hyper-scale environments. Both Intel and NVIDIA are the leaders in the market as the main providers of hardware and eager promoters of liquid cooling to enable cutting-edge computing and AI workloads. Firms such as Cool IT Systems, Asetek, and LiquidStack concentrate their activities on offering state of the art direct to – chip and immersion cooling. Green Revolution Cooling (GRC) and Submer are an emerging leader in the field of immersion cooling technologies, interested in the energy saving and spreading the more sustainable nature of data centers. And concurrently, high levels of innovation in R and D and liquid-cooled server technologies advance the industry as a result of investments by Fujitsu and IBM. Such specialized products are now being brought to market by emergence start-ups and regional firms, which were helping to make the market more competitive. Creative projects, strategic partnerships with data centers, and capitalizing on production capacity are critical methods these parties use for handling and adjusting to incipient thermal challenges. The coming of age of the industry will also affect the way in which liquid cooling should be employed within the confines of the data centers due to the emphasis placed on strategic partnerships and green technologies.

List Of Top Data Center Liquid Cooling Companies

• Asetek (Denmark)
• Green Data Center LLP (India)
• Green Revolution Cooling, Inc (USA)
• Horizon Computing Solutions, Inc (USA)
• IBM Co. (USA)
• Midas Green Technologies LLC (USA)
• Rittal GmbH & Co. (Germany)
• Schneider Electric SE (France)
• Allied Control (Hong Kong)
• Fujitsu (Japan)
• Vertiv Co. (USA)
• Chilldyne Inc. (USA)
• Liquid Cool Solutions (USA)
• Mitsubishi Electric Corporation (Japan)
• Submer (Spain)

KEY INDUSTRY DEVELOPMENTS

February 2025: Vertiv launched its portfolio of the Liquid Cooling Services worldwide, the emphasis being placed on supporting the AI and high-performance computing applications. The suite of services is centered on design, installation, commissioning and maintenance to maximize system uptime and performance as a whole.

REPORT COVERAGE

The data center liquid cooling market is going to grow substantially driven by the increasing demand for energy efficient, high cooling output systems to cater for the increasing heat output from workloads such as AI, ML and HPC. The inefficiencies of air-cooling with conventional air as a cooling mechanism in dealing with the additional heat generation from the high density of packed servers has seen operators switch to liquid cooling system for efficiency, scalability and sustainable nature. The number of immersion and direct-to-chip cooling solutions being adopted is increasing, ensuring an improvement in energy efficiency, costs of operation, and better performance results. With data centers dealing with increased expectations to become more sustainable and reduce carbon footprint levels, liquid cooling is becoming one of the critical enablers to green IT infrastructure. While some operators might find these developments costly and technically challenging at first, the long-term benefits (low prices of electricity and greater system reliability) make the change worthwhile. Building out hyper-scale infrastructure, progress in cooling technologies, increased demand for high-density computing support the momentum behind liquid cooling roll out. The fast improvement of techniques and the advanced emphasis on efficiency by the leading players of the market are going to position a fast-growth segment of the liquid cooling market. While the industry is adjusting to new regulations, established standards, and increase in sustainability consciousness, liquid cooling is likely to promote a significant improvement in meeting the requirements of the digital age with the unparalleled efficiency and environmental concerns.