Single-Phase Liquid Immersion Cooling Server Market Report: Trends, Forecast and Competitive Analysis to 2035

Single-Phase Liquid Immersion Cooling Server Market

The future of the global single-phase liquid immersion cooling server market looks promising with opportunities in the internet, telecommunication, financial, and government markets. The global single-phase liquid immersion cooling server market is expected to reach an estimated $7.9 billion by 2035 from $2.3 billion in 2027 with a CAGR of 16.4% from 2027 to 2035. The major drivers for this market are the increasing demand for efficient cooling solutions, the rising adoption of high-density computing systems, and the growing need for energy-efficient data centers.

• Lucintel forecasts that, within the type category, AI server is expected to witness higher growth over the forecast period due to rising computation density leading to heat dissipation challenges.
• Within the application category, internet is expected to witness the highest growth over the forecast period due to increasing capacity of internet service provider data centers.
• In terms of regions, APAC is expected to witness the highest growth over the forecast period due to rapid growth of data centers to meet the demand of emerging digital economies.

Emerging Trends in Single-Phase Liquid Immersion Cooling Server Market

The single-phase liquid immersion cooling server market is projected to shift from on-site pilot deployments to mass production in 2025-2027. New thermal design needs driven by AI workloads, rising rack density, water availability, and electricity cost challenges are contributing to a shift from AI thermal retrofits to purpose-built infrastructure and a measurable reduction in energy consumption. Lucintel's market view aligns with this shift.

• Sustainability: Operators are expected to further evaluate immersion cooling for waterless heat rejection and reduced facility energy consumption in 2025. Immersion cooling deployments have reported a PUE of 1.03 which is significantly lower than the 1.4 PUE for air-cooled data centers. As data center power and water permits become scarce, this trend will become more pronounced.
• High-Density Computing: In 2025, Nvidia introduced a new platform, GB200 NVL72, targeting rack-scale AI deployments with power in the range of 100 kW and beyond which make conventional air-cooling methods inadequate. There will be new market opportunities in the future as data center computing continues to outgrow air-side thermal limits.
• Modular Data Centers: In 2025, many data center infrastructure projects offer integrated immersion tanks in conjunction with prefabricated power and cooling modules, lowering the overall installation time compared to large centralized plants. This outlook will help fulfill the rapid capacity needs of enterprises and edge deployments.
• Specialized Fluids: Liquid cooling fluid suppliers are moving away from PFAS-based fluids and toward improved fire resistance, longer working life, and better material compatibility fluids. 3M's 2025 withdrawal from the PFAS fluids market means a significant reduction in PFAS-based fluids. Fluid standardization will affect total cost and risk of ownership for data centers and fluid procurement over the next 5 years.
• Service-based Adoption: By 2025, colocation providers and equipment vendors began to integrate immersion cooling solutions with service bundles for maintenance, monitoring, and retrofit as opposed to selling tanks on their own. This will decrease the technical barrier to adoption for clients that are thermally inexperienced.

The immersion cooling market will grow steadily but will still remain in the selective adoption phase. The strongest demand signals are coming from AI capacity additions. Other factors that still slow the market include the availability of fluids, warranty coverage, maintenance, and the inability to resell equipment. Those providers that create a total cost of ownership case across the lifecycle of servers will outperform vendors focused on selling cooling efficiency. Once product offerings in this marketplace become more standardized and independent performance data is provided, immersion cooling may move beyond specialized application facilities.

Recent Developments in the Single-Phase Liquid Immersion Cooling Server Market

Artificial Intelligence is leading to more powerful server racks, which means more power requirements in data centers. Most data center operators are moving from trials to repeatable deployments, while suppliers focus on developing control systems, fluids, tank systems, and maintenance models. Lucintel indicates that most of the investments will be towards high density computing and data centers with either a volatile power grid or an unstable water supply.

• Hyperscale Adoption: Server racks that support an AI rack design require a cooling system that can exceed 100kW of power. Microsoft's 2025 design focuses on liquid cooling systems for AI. Traditional air cooling systems will have trouble supporting AI at this rack level.
• Supplier Partnerships: Shell and numerous other suppliers partnered with numerous server manufacturers to conduct research on fluids with extended service intervals in 2025. As suppliers validate joint systems, procurement will become more standard across enterprise data centers.
• Capacity Expansion: In 2025, LiquidStack focused operations to manufacture immersion cooling tanks in the Americas. Previously, operations were based to support single rack deployments. With local operations, projects can be scaled to target deployments measured in megawatt power.
• Technology Launches: GRC announced the release of tank systems that can support single phase variety. The tanks were designed to house a server in a rack with a cooling system. This release improves compatibility of cooling systems with computing systems.
• Strategic Contracts: Liquid-ready infrastructure in new AI-related contracts is increasingly becoming server-ready by major cloud and colocation providers (beginning early 2026) in conjunction with a desire to build individual projects 10MW and larger. Language in contracts that bind performance of power, cooling, and service will shift immersion cooling from a further-reaching engineering possibility to a prerequisite for service.

The market for first-generation single-phase liquid immersion cooling servers is expected to shift from pilot projects to targeted production deployments in 2026. Stronger warranties and lower cooling costs will drive longer equipment life and density. For now, select adoption will be the norm as buyers await standardized fluids and more comprehensive services from original equipment manufactures. Flow cyber will capitalize on contracts that demonstrate savings in electricity consumption (versus pilot demonstrations), especially as space constraints become the limiting factor for data-center expansion.

Strategic Growth Opportunities in the Single-Phase Liquid Immersion Cooling Server Market

Single-phase liquid immersion cooling server solutions will expand beyond specialist deployments to dominate mainstream data center planning within the next five to seven years. Between 2024 and 2026 AI rack densities, power, and water use concerns further increase this addressable market. According to Lucintel, both infrastructure modernization and thermal management efficiency will continue to dominate project areas as conventional air-cooling solutions start to run their course.

• AI and High-density Computing: Immersion cooling systems enable the use of high-density computing systems, including large clusters of GPUs, with relatively minor renovations to the surrounding infrastructure. NVIDIA's GB200 NVL72 system released in March 2025 contains 72 GPUs in a single rack increasing cooling demand. Over the next three to five years, the fastest growing component of single-phase systems will be AI infrastructure since it requires the best cooling solutions to maintain expected thermal performance at the highest rack power.
• Edge and Telecom Facilities: Small edge sites require cooling that uses as little available space as possible and includes a limited mechanical infrastructure. In February 2025, Ericsson stated that 5G subscriptions had gone beyond 2.3 billion. As computing is made more distributed, immersion cooling units will become a market focus in the telecom, industrial, and remote sectors where costs associated with centralized chilled water systems are prohibitive.
• Premium Retrofit Services: In comparison to new construction, old data centers represent a greater potential revenue stream in the short term. In April 2025, the Uptime Institute reported 45% of surveyed participants experienced an unplanned outage in the last three years. Vendors can sell infrastructure tank retrofits, management of the fluid, and service contracts to provide cooling infrastructure, with an opportunity to create ongoing revenue streams beyond equipment sales.
• Sustainable Fluids and Circular Operations: Companies are looking for lowered water consumption and better reported environmental outcomes. In January 2025, the European Commission's updates to data center reporting will require larger facilities to provide sustainability disclosures and energy consumption reporting. As a result, low impact fluids, recovery, and power use effectiveness will influence buying decisions, including charging premium pricing.
• Regional Manufacturing and Customization: New local engineering could lower risk and customize systems to fit varying country standards. In May 2025, India's data centre capacity hit 1,000 MW, attracting demand outside of North America. Data center suppliers that design and build tanks to fit different regions' loading and compliance needs, will win construction orders in these regions.

The race to offer the lowest cost will change to offering the total cost. Value added services will include deployment engineering and lifecycle services along with fluids and tanks. Channels that sell immersion tanks will gain the highest market share. This will be proven by commitments to cut data center power and water consumption. Buyers will consider offering shorter lead times for installation of immersion tanks and maintaining the safety, insured, and warranted state of the data center.

Single-Phase Liquid Immersion Cooling Server Market Drivers and Challenges

The single-phase liquid immersion cooling server market includes multiple challenges and opportunities, such as increasing AI workloads, higher rack power densities, environmental regulations, and new data-center investments, as well as improving cooling technology and challenges related to the economic environment. Although progress is being made regarding performance, economic pressures are developing, as is uncertainty with regard to regulations. Limiting factors are also related to equipment, maintenance, and a lack of qualified professionals. Lucintel considers these as the primary driving factors for the market.

The factors responsible for driving this market include:

• Increasing Demands from AI-centric Applications: Increasing demands in the field of AI, ML, and other accelerator applications intensify the heat load limitations of many traditional air-cooling systems. Architecture like NVIDIA's GB200 NVL72 continued to operate 72 Blackwell GPUs in 2025. This is indicative of the power density challenges faced by data center operators. With an expected prediction of strong growth in AI and high-performance computing during the next three to five years, liquid-based thermal systems will be adopted by a greater number of operators.
• Reducing The Total Cost of Ownership (TCO): The use of single-phase immersion cooling technologies remove the need for fans, chillers, and air handling systems, leading to savings due to a lower electricity consumption. In 2025, operational budget constraints coupled with high electricity prices and more expensive grid power drove the data-center industry to focus on greater efficiency. Lower auxiliary power requirements can improve the financial performance of high-density data centers. During the next three to five years, high prices and increased sustainability goals coupled with limited power grid capacity will prioritize the efficiency of cooling systems.
• Data-Center Investment: Data-center capacity will continue to grow through deployment of digital services, generative AI, and edge computing. In 2025, hyperscale tech giants continued to announce multibillion-dollar AI infrastructure investments. As a result, the industry is poised to grow with complementary innovations in advanced thermal management. Immersion cooling systems can place high-density servers in limited space and reduce the reliance on large raised-floor infrastructure. In the next three to five years, capital expenditures on AI-ready facilities will drive the growth of the immersion cooling system ecosystem, consisting of suppliers, integrators, fluid manufacturers, and specialized server designers.
• Technological Innovation: Single-phase immersion cooling is now more viable with advancements in fluids, tanks, pumps, heat exchangers, monitoring systems, and server compatibility. In 2025, vendors started to sell more modular systems for rack level deployment and easier system serviceability and integration into a facility's water loop. Additional work on the control system can address the challenges related to operational effectiveness and maintenance. In the next three to five years, changes to the system will enable more customers to utilize immersion cooling and make the systems simpler to operate and control.
• Sustainability and Environmental Performance: In comparison to traditional cooling systems, immersion cooling can dramatically decrease water utility consumption and increase thermal efficiency. In March 2025, data center sustainability programs still placed an emphasis on water usage, carbon reporting, and energy efficiency when evaluating investment opportunities. Water scarcity and strict legislative frameworks make this type of cooling particularly relevant. In the next three to five years, the cooling technology will become entrants to the market due to combined sustainability reporting efforts, mandated corporate emissions reduction targets, and local resource shortages.

The challenges facing this market include:

• High Initial Costs and Retrofitting Complexities: The single-phase immersion cooling process requires special tanks, dielectric fluids, pumps, heat exchangers, and quite a bit of new equipment and a different way of doing things (e.g. controls and procedures). In 2025, most data center operators preferred traditional air-cooled systems. This was the case because standard air-cooled data center systems and operations aligned with traditional data center rack architectures and services. Adding immersion cooling may require more validation of servers, changes to the floor layout, and fluid handling. In the next three to five years, small companies and utilities with limited engineering will likely find the cost and the level of work to be a barrier to entry.
• Component Validation and Warranty Issues: These components can't all be validated for immersion: servers, storage, cables, seals, and more. As of June 2025, operators still had to call for validated compatibility in order to deploy liquid-cooled equipment on a large scale. This showed a lack of clarity regarding warranties, component life, and the availability of replacement components. A limited number of suppliers for the necessary fluids and hardware means these systems become even riskier. In the next 3-5 years, the market for these platforms should increase to provide bolder, validated frameworks, decrease uncertainty, and speed up procurement.
• Fluid Handling and Regulatory Compliance: Dielectric fluids are difficult to manage because of leakage, disposal, fire classification, and the regulatory compliance surrounding the chemical. In 2025, more regulatory oversight of chemicals and waste and increased industrial energy use brought more inspections. This, and the existing regulatory requirements, will make a difference in the cost of deployment for a lengthy period of time. Clarification in the regulations in the next 3-5 years will help drive the volume of safe fluids deployment and increase systems framework design. Systems that do not meet these requirements will become obsolete.

The market for single-phase liquid immersion cooling servers is expected to grow as AI workloads and high density computing become more prevalent due to increases in energy costs and sustainability concerns. More advanced technology and infrastructure will lead to better performance and deployment flexibility. However, there will be an initial cost barrier, limited compatibility, specialized maintenance, supply-chain obstacles and the uncertainty of fluid regulations in the short term. Market expansion will depend on more standardized designs and server platforms, improvements in technician training, better practices for managing fluid systems, and improvements in supplier networks. Over the next three to five years, companies that lead in technological innovations, expand their business operations, and better comply with the environmental regulations will have the greatest opportunity.

List of Single-Phase Liquid Immersion Cooling Server Market Companies

Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies single-phase liquid immersion cooling server market companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the single-phase liquid immersion cooling server market companies profiled in this report include-

• Dell
• HPE
• Cisco
• Supermicro
• Fujitsu
• 2CRSI
• Inspur
• Sugon
• H3C
• Lenovo

Single-Phase Liquid Immersion Cooling Server Market by Segment

The study includes a forecast for the global single-phase liquid immersion cooling server market by type, application, and region.

Single-Phase Liquid Immersion Cooling Server Market by Type [Value ($B) from 2019 to 2035]:

• AI Server
• General Purpose Server
• Others

Single-Phase Liquid Immersion Cooling Server Market by Application [Value ($B) from 2019 to 2035]:

• Internet
• Telecommunications
• Financial
• Government
• Others

Single-Phase Liquid Immersion Cooling Server Market by Region [Value ($B) from 2019 to 2035]:

• North America
• Europe
• Asia Pacific
• The Rest of the World

Country Wise Outlook for the Single-Phase Liquid Immersion Cooling Server Market

The market for single-phase liquid immersion cooling offers engineered data center infrastructure from pilot deployments as AI workloads require more rack power. Between 2025 and 2027, suppliers anticipate combining liquid systems incorporating dielectric fluids with more dense servers. Infrastructure operators are looking into economics of the energy, water and maintenance. Based on Lucintel's latest report, deployment momentum relates to data center investment and cooling technology innovations.

• United States: GRC and Shell have continued developing immersion-cooling systems using Shell engineered fluids, and liquid-cooling evaluations for AI infrastructure by hyper-scale and colocation operators in the USA have continued (2025). These efforts will align fluids, tanks and a service offering to reduce the barriers for single-phase retrofits in the USA over the next 3 to 5 years.
• China: China Telecom has driven liquid cooling for high-density computing and continued investment in the Digital China strategy has supported the development of China's computing hubs (2025). This activity is important as large state-owned facilities could build the required demand locally for tanks, pumps, fluids, and service offerings.
• Germany: Schneider Electric expanded its liquid-cooling systems and high-density data center offerings to include liquid-related immersion-cooling infrastructure throughout Europe (2025). Efforts to address liquid-cooling systems for high-density data centers is relevant as energy and sustainability related data center improvements are necessary throughout Europe.
• India: Yotta Infrastructure continues to grow its AI-focused data center platform and has announced additional NVIDIA capacity. Meanwhile, Indian operators have started evaluating liquid cooling for higher rack densities (2025). This is important because developing AI infrastructure quickly drives innovation in cooling architectures with less water usage and the need for less major system redesign.
• Japan: Alongside broader Japanese investments in AI-ready data centers (2025), NTT DATA has continued their testing of advanced liquid cooling for high performance computing. This is important because of Japan's limited sites, power-efficiency, and strong machinery ecosystem; all of this has the potential to accelerate the acceptance of compact immersion computing.

Features of the Global Single-Phase Liquid Immersion Cooling Server Market

• Market Size Estimates: single-phase liquid immersion cooling server market size estimation in terms of value ($B).
• Trend and Forecast Analysis: Market trends (2019 to 2026) and forecast (2027 to 2035) by various segments and regions.
• Segmentation Analysis: single-phase liquid immersion cooling server market size by type, application, and region in terms of value ($B).
• Regional Analysis: single-phase liquid immersion cooling server market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
• Growth Opportunities: Analysis of growth opportunities in different types, applications, and regions for the single-phase liquid immersion cooling server market.
• Strategic Analysis: This includes M&A, new product development, and competitive landscape of the single-phase liquid immersion cooling server market.

Analysis of competitive intensity of the industry based on Porter's Five Forces model.

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This report answers following 11 key questions:

• Q.1. What are some of the most promising, high-growth opportunities for the single-phase liquid immersion cooling server market by type (AI server, general purpose server, and others), application (internet, telecommunications, financial, government, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
• Q.2. Which segments will grow at a faster pace and why?
• Q.3. Which region will grow at a faster pace and why?
• Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
• Q.5. What are the business risks and competitive threats in this market?
• Q.6. What are the emerging trends in this market and the reasons behind them?
• Q.7. What are some of the changing demands of customers in the market?
• Q.8. What are the new developments in the market? Which companies are leading these developments?
• Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
• Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
• Q.11. What M&A activity has occurred in the last 7 years and what has its impact been on the industry?