Data Center Liquid Cooling Market Size (2025 – 2030)

The Data Center Liquid Cooling Market was valued at USD 5.36 Billion in 2024 and is projected to reach a market size of USD 17.46 Billion by the end of 2030. Over the forecast period of 2025-2030, the market is projected to grow at a CAGR of 21.75%.

As the amount of data produced worldwide continues to expand, the demand for sophisticated cooling solutions to handle the heat from densely populated server racks is increasing. Conventional air-based cooling methods are approaching their efficiency limits, prompting numerous data centers to explore liquid cooling technologies. Liquid cooling is recognized for its enhanced performance, as liquids are capable of absorbing and transferring heat more efficiently than air, resulting in improved thermal management and lower energy usage.

Key Market Insights:

Liquid cooling solutions also contribute to the overall reliability and durability of the system. Unlike air-cooled setups, they are less vulnerable to external contaminants such as dust and debris. By consistently maintaining optimal operating temperatures, liquid cooling can prolong the lifespan of server components, minimizing hardware failures and decreasing the need for frequent replacements.

Market Drivers:

Rising Data Center Density Fuels Market Expansion.

The Data Center Liquid Cooling Market is experiencing notable growth, fueled by several key factors. A major driver is the rising density of data centers. As computing power becomes increasingly concentrated within smaller footprints, conventional air-cooling methods are proving inadequate, prompting a shift toward liquid cooling solutions.

Additionally, the expansion of cloud computing is further propelling market growth. Cloud service providers require large-scale, high-efficiency data centers to support their operations, and liquid cooling technologies are being increasingly implemented to address the cooling needs of these high-performance infrastructures.

Technological Advancements in Liquid Cooling Drive Market Growth.

The Data Center Liquid Cooling Market is witnessing significant expansion, driven by multiple growth factors, with advancements in liquid cooling technology at the forefront. Ongoing innovations in this domain have enhanced the efficiency, reliability, and scalability of liquid cooling solutions, making them increasingly appealing to data center operators.

Another important growth driver is the heightened emphasis on reducing the carbon footprint of data centers. In response to sustainability initiatives by both corporations and governments, data centers are implementing liquid cooling systems that lower energy consumption and minimize environmental impact. This approach aligns with global efforts to cut emissions and promote environmentally responsible operations across industries.

Market Restraints and Challenges:

High Upfront Installation Costs Hinder Market Growth.

The expansion of the Data Center Liquid Cooling Market is constrained by several challenges, with high upfront installation costs representing a key limiting factor. Liquid cooling systems typically involve higher installation expenses compared to traditional air-based cooling solutions, making the initial investment a potential barrier for smaller data centers or organizations with constrained budgets.

Implementation complexity is another notable restraint. Deploying liquid cooling systems requires specialized design and engineering expertise, which can complicate integration into existing data center infrastructures. This added complexity may result in extended installation timelines and increased costs, potentially discouraging adoption by some companies.

Additionally, limited awareness of liquid cooling technologies in emerging markets further restricts market growth. Many businesses in these regions continue to depend on conventional cooling methods due to insufficient understanding of the advantages and capabilities of liquid cooling solutions, thereby limiting market potential in areas experiencing rapid data center development.

Market Opportunities:

Growing Adoption of AI and Machine Learning Creates Market Opportunities.

The Data Center Liquid Cooling Market offers multiple growth opportunities, particularly driven by the increasing adoption of artificial intelligence (AI) and machine learning (ML). These technologies demand substantial computational power, resulting in high heat generation. Liquid cooling systems provide an efficient solution for managing these thermal loads, making them critical for data centers supporting AI and ML workloads.

Another significant opportunity lies in the rising emphasis on sustainable and environmentally friendly data centers. With mounting pressure to lower carbon footprints, operators are seeking energy-efficient cooling solutions. Liquid cooling, due to its reduced energy consumption and minimized environmental impact, aligns closely with these sustainability objectives, presenting a strong growth avenue.

Furthermore, the proliferation of edge computing and 5G services creates additional market potential. Edge data centers, designed to support latency-sensitive applications, are being established in diverse locations and require advanced cooling technologies to maintain optimal performance. Liquid cooling systems, capable of effectively managing heat in compact environments, are particularly well-suited for these deployments.

DATA CENTER LIQUID COOLING MARKET REPORT COVERAGE:

Data Center Liquid Cooling Market Segmentation:

Data Center Liquid Cooling Market Segmentation By Component:

• Solution
• Service

The solution segment led the market, capturing a significant revenue share, driven by technological, environmental, and economic factors. A key contributor is the rapid growth of high-performance computing (HPC) and artificial intelligence (AI) workloads, which produce considerably more heat than conventional data center operations. As organizations increasingly adopt AI, machine learning, and big data analytics, the demand for advanced cooling solutions—particularly liquid-based systems capable of efficiently managing dense, high-heat environments—has become critical.

The service segment is expected to experience growth over the forecast period, owing to the increasing complexity of liquid cooling systems, which necessitate specialized expertise for installation, maintenance, and optimization. Unlike traditional air-cooling systems, liquid cooling employs advanced technologies such as immersion cooling, direct-to-chip liquid cooling, and rear-door heat exchangers.

Data Center Liquid Cooling Market Segmentation By Solution:

• Direct Liquid Cooling
• Indirect Liquid Cooling

The direct liquid cooling segment dominated the market, driven by increasing demand for thermal efficiency in high-density computing environments. With the rapid growth of big data analytics, AI, machine learning, and blockchain technologies, servers are becoming increasingly powerful and generate substantial heat. Direct liquid cooling (DLC) solutions, which involve applying liquid coolant directly to processors and other components, provide significantly superior heat removal compared to traditional air-cooling methods.

The indirect liquid cooling segment is projected to register a notable CAGR during the forecast period, fueled by its ability to offer a balanced, lower-risk transition for data centers moving away from conventional air cooling. In indirect liquid cooling systems, liquid absorbs heat at the rack or row level—typically via rear-door heat exchangers or in-row cooling units—without directly contacting electronic components. This approach enables data centers to achieve meaningful improvements in thermal management without extensive redesigns of existing server infrastructure, making it particularly appealing for operators seeking incremental upgrades rather than complete system overhauls.

Data Center Liquid Cooling Market Segmentation By Service:

• Design and Consulting
• Maintenance and Support
• Installation and Deployment

The installation and deployment segment led the market, as many existing data centers—originally designed for air cooling—are transitioning to more efficient cooling solutions to accommodate high-density computing workloads driven by bi

g data, AI, and cloud applications. Retrofitting active data centers with liquid cooling systems is a complex endeavor that requires meticulous planning, minimal operational disruption, and comprehensive post-installation testing. Specialized installation and deployment services are essential for managing these retrofits, driving market growth as companies seek partners with proven expertise across both legacy and modern cooling infrastructures.

The maintenance and support segment is projected to expand over the forecast period. Contemporary liquid cooling systems are increasingly integrated with IoT sensors and advanced monitoring tools that provide real-time data on coolant flow, pressure levels, and overall system performance. Maintenance and support services are evolving to incorporate predictive analytics capable of anticipating potential failures. This proactive strategy reduces unplanned downtime, extends the operational lifespan of cooling infrastructure, and enables data center operators to optimize total cost of ownership.

Data Center Liquid Cooling Market Segmentation By Type of Cooling:

• Cold Plate Cooling
• Immersion Cooling
• Spray Liquid Cooling

The cold plate cooling segment led the market, as traditional air-cooling solutions encounter physical constraints in densely packed server environments. Cold plate cooling allows data center operators to integrate greater computing power within the same or smaller physical footprint, optimizing the return on investment for costly real estate. This capability is increasingly critical as organizations expand their digital operations while managing infrastructure growth costs.

The immersion cooling segment is projected to grow during the forecast period. Advancements in dielectric fluid formulations and tank designs have enhanced the reliability, safety, and cost-efficiency of immersion cooling systems. Improvements in both single-phase and two-phase immersion techniques now provide tailored solutions to meet varying performance and maintenance requirements. Combined with stronger support from OEMs and hardware providers, these developments are lowering integration barriers and accelerating the widespread adoption of immersion cooling technologies.

Data Center Liquid Cooling Market Segmentation By Data Center Type:

• Hyperscale Data Centers
• Colocation Data Centers
• Enterprise Data Centers
• Edge Data Centers
• High-Performance Computing (HPC) Data Centers

The hyperscale data centers segment led the market, driven by the escalating computational demands of cloud services, artificial intelligence (AI), big data analytics, and high-performance computing (HPC). Major hyperscalers, including Amazon Web Services (AWS), Google Cloud, Microsoft Azure, and Meta, are continuously expanding their global infrastructure to support these workloads, many of which generate heat levels that traditional air-cooling systems cannot efficiently manage. Liquid cooling provides a scalable, energy-efficient solution that accommodates higher rack densities, enhances performance, and reduces power consumption.

The edge data centers segment is expected to register significant growth over the forecast period, driven by the need for compact, high-performance, and energy-efficient cooling solutions in decentralized IT environments. Unlike centralized data centers, edge facilities are located closer to end-users to minimize latency and support real-time applications such as autonomous vehicles, industrial IoT, augmented/virtual reality (AR/VR), and smart city deployments. These sites often operate under space- and power-constrained conditions, rendering traditional air cooling inefficient and impractical. Liquid cooling—particularly compact solutions such as cold plates and immersion systems—enables edge data centers to maintain optimal thermal performance even under intensive computing loads.

Data Center Liquid Cooling Market Segmentation By End Use:

• IT
• Healthcare
• Telecom
• Retail & E-commerce
• BFSI
• Energy
• Entertainment & Media
• Others

The IT segment led the market, driven by the increasing size and complexity of IT workloads. The rise of big data, cloud computing, and AI/ML applications has made IT workloads more computationally intensive and heat-generating. High-density server configurations supporting these workloads often produce significantly more heat than traditional data center designs can manage. Liquid cooling offers a scalable solution by efficiently managing the thermal load of individual components, such as processors and GPUs, or entire systems, enabling organizations to expand their IT infrastructure without being limited by cooling constraints.

The healthcare segment is projected to experience strong growth over the forecast period, fueled by the sector’s increasing reliance on digital health technologies, data-driven medical research, and the need for secure, high-performance computing. Healthcare organizations are adopting solutions such as electronic health records (EHRs), telemedicine platforms, AI-powered diagnostics, and advanced imaging systems, all of which demand extensive data processing and storage. As these applications generate substantial heat loads, data centers supporting healthcare operations require efficient cooling solutions to ensure performance, reliability, and uptime.

Data Center Liquid Cooling Market Segmentation: Regional Analysis:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

The North American data center liquid cooling market dominates the region, driven by rapid technological advancements and the growing adoption of high-performance computing (HPC) and artificial intelligence (AI) workloads. As demand for cloud services and data analytics continues to rise, data centers are increasingly implementing energy-efficient cooling solutions to manage power consumption and effectively dissipate heat.

The U.S. market is expected to grow steadily, supported by the expansion of hyperscale data centers and the rising need for high-density computing. These facilities, which handle extensive data workloads from sectors such as AI, machine learning, and big data analytics, rely on efficient cooling systems to prevent overheating and ensure consistent operational reliability.

The Asia Pacific data center liquid cooling market is projected to register the fastest growth, driven by the rapid development of digital infrastructure and increasing demand for cloud services. Countries such as India, Singapore, and South Korea are experiencing a surge in data center construction, fueled by the growing reliance on data in industries like e-commerce, banking, and telecommunications.

Japan’s market is also expected to grow significantly in the coming years, supported by substantial investments in IoT, AI, and cloud computing. High-performance data centers in Japan must manage large-scale computational workloads while addressing high energy costs and environmental concerns. Liquid cooling provides an effective solution to reduce energy consumption while maintaining the reliability and performance of data center operations.

COVID-19 Impact Analysis:

Innovative technologies have significantly enhanced the efficiency and performance of data center cooling solutions in response to the impacts of COVID-19. Advances such as automation, AI integration, and material innovations are driving the evolution of products to address diverse industry requirements. These improvements enable companies to meet stringent regulatory standards while providing cost-effective and sustainable solutions, thereby supporting accelerated growth in the global market.

Latest Market News:

In April 2025, Fujitsu formed a strategic partnership with Super Micro Computer, Inc., a U.S.-based high-performance server manufacturer, and Nidec Corporation, a Japanese electric motor producer, to enhance data center energy efficiency. The collaboration aims to integrate Fujitsu's liquid-cooling monitoring and control software with Super Micro Computer, Inc.’s GPU servers and Nidec Corporation’s high-efficiency liquid-cooling systems. The initiative seeks to develop a solution that improves power usage effectiveness (PUE) for data centers, enabling more efficient energy consumption without compromising performance.

In December 2024, COOLIT SYSTEMS launched the CHx1000, a liquid-to-liquid coolant distribution unit (CDU) designed specifically for advanced liquid-cooled AI and high-performance computing (HPC) servers. The CHx1000 addresses the stringent thermal management requirements of AI racks while seamlessly fitting within the aisles of liquid-cooled data centers. Its compact design, occupying only a single-rack footprint, allows easy installation within standard data center layouts and positioning directly alongside server racks.

Latest Trends and Developments:

The market growth is fueled by the rising adoption of immersion cooling as an advanced solution for thermal management in data centers. This technology involves fully submerging electronic components in a non-conductive liquid, which efficiently dissipates heat. With increasing hardware density and the demand for more effective cooling solutions, immersion cooling offers a practical alternative to conventional methods. It reduces energy consumption for cooling while enhancing hardware performance by maintaining optimal operating temperatures.

Key Players in the Market:

1. 3M Company
2. CoolIT Systems Inc.
3. Alfa Laval AB
4. Mitsubishi Electric Corporation
5. IBM Corporation
6. Schneider Electric SE
7. Rittal GmbH & Co. KG
8. Submer Technologies
9. STULZ GmbH
10. Vertiv Group