Global Data Center Cooling Market Landscape 2026-2031

The global data center cooling market size is expected to grow at a CAGR of 15.20% from 2025 to 2031.

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.

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.
  • Servers
  • Storage Systems
  • Network Infrastructure

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.
  • CRAC & CRAH Units
  • Chiller Units
  • Cooling Towers, Condensers & Dry Coolers
  • Other Cooling Units

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.
  • Tier I & Tier II
  • Tier III
  • Tier IV

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

• The North American data center cooling market is primarily driven by the US, which accounts for the majority of regional demand for advanced cooling systems. The country hosts several hyperscale and colocation facilities across Virginia, Texas, Arizona, Georgia, Ohio, Oregon, Illinois, and other locations. Canada is also witnessing growing investments in innovative cooling technologies, supported by the development of AI-optimized data centers. Data center operators across North America are increasingly adopting hybrid cooling architectures, direct-to-chip liquid cooling, high-efficiency chillers, intelligent cooling controls, free cooling technologies, and water-efficient cooling systems to support next-generation AI workloads.
• Western Europe is one of the leading sustainability-focused data center markets worldwide, with countries such as the UK, Germany, France, the Netherlands, Spain, and Belgium attracting investments from colocation operators and hyperscale cloud companies. Stringent environmental regulations across the region are encouraging data center operators to invest in energy-efficient cooling systems. Operators are prioritizing indirect evaporative cooling and chilled-water cooling, while liquid cooling and free cooling technologies are gaining traction as companies aim to reduce Power Usage Effectiveness (PUE) across their facilities. Additionally, demand for cooling systems that enable waste heat recovery and reuse is expected to increase across Western European countries during the forecast period.
• The Nordic region is an attractive destination for energy-efficient data center development, supported by its naturally cool climate, stable electricity grids, abundant renewable energy resources, and government support for digital infrastructure development. Data centers across Sweden, Norway, Denmark, Finland, and Iceland increasingly rely on free cooling and seawater cooling technologies to reduce dependence on mechanical cooling infrastructure and lower operational costs. The availability of renewable electricity further strengthens the region's attractiveness for AI-ready data center development. Additionally, the integration of district heating networks with data centers enables operators to recover and reuse waste heat, improving overall energy utilization across facilities.
• The Middle Eastern data center cooling market is driven by the extreme temperatures across countries such as the UAE, Saudi Arabia, Qatar, Israel, Oman, and Kuwait, which create significant thermal management challenges. These climatic conditions make advanced cooling systems essential for maintaining data center performance and reliability. Operators across the region are investing in high-capacity chillers, chilled-water systems, indirect evaporative cooling, liquid cooling, and water-efficient cooling technologies designed to operate under high-temperature conditions. Additionally, the growing adoption of sustainability initiatives is encouraging data center operators to invest in energy-efficient cooling solutions to optimize energy consumption and improve facility performance.
• APAC is one of the fastest-growing data center markets, driven by rapid digitalization, cloud adoption, AI deployment, rising internet penetration, and government support for digital infrastructure expansion. The region's diverse climatic conditions require operators to deploy climate-specific cooling solutions, ranging from traditional air cooling to advanced liquid cooling technologies. The expansion of AI infrastructure across APAC is increasing demand for direct-to-chip cooling, immersion cooling, coolant distribution units, and rear-door heat exchangers to support high-density computing environments. Additionally, the growing focus on sustainability among cloud providers and data center operators is expected to accelerate investments in energy-efficient and water-efficient cooling systems across the region.
• North America
  • US
  • Canada
• Latin America
  • Brazil
  • Mexico
  • Chile
  • Colombia
  • Rest Of Latin America
• Western Europe
  • Uk
  • Germany
  • France
  • Netherlands
  • Ireland
  • Switzerland
  • Italy
  • Spain
  • Belgium
  • Other Western European Countries
• Nordics
  • Denmark
  • Sweden
  • Norway
  • Finland & Iceland
• Central & Eastern Europe
  • Russia
  • Poland
  • Other Central & Eastern European Countries
• Middle East
  • UAE
  • Saudi Arabia
  • Israel
  • Other Middle Eastern Countries
• Africa
  • South Africa
  • Kenya
  • Nigeria
  • Egypt
  • Other African Countries
• APAC
  • China
  • Hong Kong
  • Australia
  • New Zealand
  • Japan
  • India
  • South Korea
  • Taiwan
  • Rest Of APAC
• Southeast Asia
  • Singapore
  • Indonesia
  • Malaysia
  • Thailand
  • Philippines
  • Vietnam
  • Other Southeast Asian Countries

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.

Prominent Data Center Cooling Providers

• 3M
• AAON
• Accelsius
• Aermec
• Aggreko
• Airedale
• AIRSYS
• Alfa Laval
• Aqua Cooling
• Aquila Capital
• Asetek
• Asperitas
• Austin Hughes Electronics
• Baltimore Aircoil Company
• Belimo
• Black Box
• Blue Star
• Nanjing Canatal Data-center Environmental Tech
• Canovate Group
• Carrier
• Castrol
• Chatsworth Products
• CITEC International
• ClimateWorx International
• Condair Group
• Coolcentric
• Cooler Master
• CoolIT Systems
• COOLtec Systems
• Curtiss-Wright
• Danfoss
• Daikin Applied
• DCX LIQUID COOLING SYSTEMS
• Degree Controls
• Delta Electronics
• Dew Point Systems
• D'Hondt Thermal Solutions
• Dow
• DUG
• Enex Technologies
• ENGIE
• Engineered Fluids
• ENVICOOL
• EVAPCO
• FlaktGroup
• Flex
• Flex-Tek
• Flowserve
• Fourier Modular Data Center
• Fuji Electric
• GIGABYTE
• Green Revolution Cooling (GRC)
• GRUNDFOS
• Guntner
• HiRef S.p.A.
• Hitachi Energy
• Honeywell
• Huawei Technologies
• Iceotope
• Bosch
• Kaori
• Kelvion
• Kirloskar Chillers
• Koolance
• KSTAR
• KyotoCooling
• Legrand
• Lennox
• LiquidCool Solutions
• Midas Immersion Cooling
• Midea Building Tech.
• Jabil
• Mitsubishi Electric
• Moog
• Munters
• Nidec Corporation
• Nortek Air Solutions
• nVent
• OceanAire
• OptiCool
• PETRA Engineering Industries
• Renovo Zhuhai
• Rittal
• Schneider Electric
• Shanghai Shenglin M&E Technology
• Shenling
• Siemens
• SKM Air Conditioning
• SPX Cooling Tech
• STULZ
• Submer
• SuperX AI Technology
• Swegon Group
• SWEP
• Systemair Group
• The Chemours Company
• The Lubrizol Corporation
• TICA
• Trane
• Trosten Industries Company
• SYCLEF
• United Metal Products
• Vaisala
• Valvoline
• Vertiv
• Vigilent
• Wakefield Thermal
• Zutacore
• Wafr Technologies
• Barocal

KEY QUESTIONS ANSWERED;

1. How big is the global data center cooling market?

2. What is the growth rate of the global data center cooling market?

3. What are the key trends in the global data center cooling market?