The global data center liquid cooling market size reached USD 3.5 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 16.5 Billion by 2033, exhibiting a growth rate (CAGR) of 18.56% during 2025-2033. At present, North America holds the biggest market share owing to its sophisticated technological infrastructure, elevated need for effective cooling solutions, substantial investments in data centers, and a robust presence of major industry players promoting innovation and uptake. The market is experiencing a positive outlook, owing to the rising data center density, the increasing focus on energy efficiency to mitigate environmental pollution and maintain sustainability, and the growing need for maintaining optimal operating temperatures to ensure enhanced performance and reliability.
As data centers evolve to handle larger volumes of data and complex computing tasks, the density of servers and equipment rises. This increases heat production, making conventional air cooling more inefficient. Liquid cooling offers a more effective way to manage the increased thermal output, ensuring peak performance. Furthermore, there is a higher focus on energy efficiency in industries, particularly in data centers, where energy usage is substantial. Liquid cooling systems utilize less energy than traditional air conditioning methods, enabling data centers to lower operational costs and achieve sustainability objectives by reducing power usage and enhancing cooling efficiency. Apart from this, environmental regulations and sustainability efforts are encouraging businesses to implement more eco-friendly technologies. Liquid cooling technologies minimize the carbon footprint of data centers by enhancing heat dissipation, reducing reliance on energy-intensive air conditioning systems, and ultimately promoting eco-friendly operations and compliance with regulations. These factors are positively influencing the data center liquid cooling market forecast, indicating robust growth.
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Increasing Data Center Density
The rising need for liquid cooling solutions in data centers is fueled by the expanding number of data centers, which must manage greater workloads resulting from the widespread use of cloud services, big data analysis, and artificial intelligence (AI) technologies. Contemporary data centers, characterized by a greater concentration of servers and devices, necessitate effective cooling solutions to regulate the significant heat produced by these systems. Liquid cooling systems are especially effective for this purpose, as they directly remove heat from essential hot spots, maintaining ideal operating conditions and preventing possible thermal problems that could undermine hardware performance and reliability. Moreover, data center operators aim to optimize infrastructure use. A March 2024 report from the Observer Research Foundation indicates that India currently has more than 150 data centers, placing it 14th in the world. The increasing quantity of data centers is boosting the need for liquid cooling systems.
Government Regulations and Compliance Standards
Government regulations and compliance requirements are significantly influencing the acceptance of liquid cooling in data centers. Numerous regions are implementing stringent environmental and energy usage regulations that mandate companies to lower their carbon emissions and enhance energy efficiency. Data centers, as major users of energy, face increasing pressure to adopt sustainable cooling technologies to comply with these regulations. Liquid cooling systems, being more energy-efficient and generating fewer emissions than conventional air cooling, assist data centers in fulfilling these compliance standards. With governments and regulatory agencies enforcing tougher environmental standards and promoting green building certifications, liquid cooling is becoming an essential element for data centers to meet sustainability objectives. The growing focus on environmental accountability, combined with regulatory demands, is driving the need for liquid cooling systems in data centers that seek to stay compliant while enhancing energy efficiency and lowering operational expenses.
Growing Demand for Hybrid Cooling Solutions
The rising need for hybrid cooling solutions is a key factor propelling the data center liquid cooling market growth. As data centers encounter more intricate thermal management issues, especially with high-performance computing (HPC) and AI tasks, operators are looking for adaptable and effective cooling solutions. Hybrid cooling approaches that integrate air and liquid cooling provide improved flexibility and efficiency, allowing data centers to optimize energy usage and handle heat more efficiently. These solutions allow for customizing cooling techniques to meet specific workloads, guaranteeing that both standard and high-density systems receive adequate cooling. For example, in 2025, Telehouse launched a liquid cooling lab at its London Docklands campus to support rising AI and HPC demands. Partnering with vendors like Accelsius, JetCool, Legrand, and EkkoSense, the lab allows customers to explore hybrid cooling strategies. The initiative aims to optimize real-time thermal management in next-gen data centers.
Rise of AI and ML
The swift expansion of AI and ML is a key factor contributing to the rising use of liquid cooling solutions in data centers. AI and ML tasks require significant computational strength, frequently depending on specialized hardware like GPUs and TPUs, which generate considerable heat. Conventional air cooling solutions have difficulty handling the thermal output of these high-performance parts, resulting in overheating hazards and possible hardware damage. Liquid cooling, due to its excellent heat dissipation properties, efficiently manages the high thermal demands created by AI and ML applications, promoting optimal functionality and minimizing the chances of system failure. To address these requirements, firms such as Vertiv introduced their Liquid Cooling Services portfolio in 2025, aimed at meeting the demands of AI and high-density computing settings. This service offers comprehensive lifecycle assistance, encompassing installation, fluid management, and urgent maintenance, improving cooling efficiency and total system dependability.
Focus on Environmental Sustainability and Green Initiatives
With growing awareness about the environmental effects of energy-heavy cooling systems and tighter government policies on carbon emissions, operators of data centers are pursuing more eco-friendly alternatives. Liquid cooling offers a significant benefit compared to conventional air cooling systems by utilizing less energy and enabling enhanced heat dissipation. Moreover, these systems can potentially recycle waste heat for purposes like district heating, thereby lowering energy usage and carbon emissions even more. With organizations and governments focusing on environment-friendly technologies, liquid cooling is increasingly vital for data centers to achieve sustainability goals and adhere to regulations. For example, in 2024, Refroid Technologies launched India's first indigenously developed single-phase liquid immersion cooling solutions for data centers, targeting GPU-intensive AI workloads. The system promised a PUE as low as 1.05, slashing energy use and emissions by up to 40%. This "Make in India" innovation supported sustainable growth amid rising data demands.
Advancements in Liquid Cooling Solutions
Innovations like direct-to-chip cooling, immersion cooling, and cold plate cooling are greatly enhancing the efficiency and reliability of these systems. The advancement of sophisticated dielectric fluids enhances thermal conductivity, ensuring superior heat dissipation while preserving safety and compatibility with delicate components. Additionally, the implementation of closed-loop systems offers a more effective and sealed cooling mechanism, minimizing maintenance and enhancing system lifespan. These ongoing improvements enhance liquid cooling's scalability and flexibility for various data center setups, enabling them to satisfy the growing cooling requirements of high-performance tasks. For instance, in 2025, AWS revealed it had developed and deployed a custom liquid cooling system in just 11 months to support the growing heat demands of next-gen AI chips. The direct-to-chip solution uses a closed-loop fluid system for efficient heat extraction without increasing water usage. It is now being scaled across AWS data centers to meet evolving AI workloads.
IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2025-2033. Our report has categorized the market based on component, data center type, end use, and application.
Breakup by Component:
Solution accounts for the majority of the market share
The report has provided a detailed breakup and analysis of the market based on the component. This includes solution (direct liquid cooling and indirect liquid cooling) and services (design and consulting, installation and deployment, and support and maintenance). According to the report, solution represented the largest segment.
Solution includes the selection and integration of cooling units, infrastructure, and control systems tailored to meet the specific requirements of the data center environment. It may vary based on factors, such as data center size, workload density, environmental considerations, etc., with customization options available to optimize performance and energy efficiency.
Breakup by Data Center Type:
Large data centers hold the largest market share
A detailed breakup and analysis of the market based on the data center type have also been provided in the report. This includes large data centers, small and medium-sized data centers, and enterprise data centers. According to the report, large data centers accounted for the largest market share.
Large data centers usually belong to hyperscale cloud providers, colocation facilities, or enterprises with extensive IT infrastructure requirements. These data centers are equipped with numerous servers and high-density equipment, generating heat that requires efficient cooling solutions. Liquid cooling systems in large data centers are characterized by their scalability, high capacity, advanced control features to manage complex cooling demands effectively, etc.
Breakup by End Use:
Enterprises represent the leading market segment
The report has provided a detailed breakup and analysis of the market based on the end use. This includes cloud providers, colocation providers, enterprises, and hyperscale data centers. According to the report, enterprises represented the largest segment.
Enterprises use data centers to support their internal IT operations and services. These organizations include corporations, government agencies, educational institutions, and healthcare providers. Liquid cooling solutions for enterprises focus on providing efficient and reliable cooling for their IT infrastructure, ensuring optimal performance and uptime while minimizing operational costs and environmental impact.
Breakup by Application:
IT and telecom dominate the market share
The report has provided a detailed breakup and analysis of the market based on the application. This includes BFSI, IT and telecom, media and entertainment, healthcare, government and defense, retail, research and academic, and others. According to the report, IT and telecom represented the largest segment.
In the IT and telecom sector, data centers are essential for hosting and managing network infrastructure, telecommunications equipment, and digital services. Liquid cooling solutions in this sector focus on optimizing the performance and reliability of IT equipment, reducing downtime, and enhancing energy efficiency to support the high demands of network operations and communication services.
Breakup by Region:
North America leads the market, accounting for the largest data center liquid cooling market share
The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (Germany, France, the United Kingdom, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America accounted for the largest market share.
The increasing popularity of direct-to-chip liquid cooling in North America is augmenting the regional market. Several vendors in the Southeastern and Western parts of the region are shifting to water-cooled chillers, which have an economizer mode that enables partial facility cooling by using outside air. Besides this, the data center infrastructure solutions in Canada are growing, owing to the escalating demand for efficient data centers and the launch of initiatives for ecological data center solutions, thereby acting as another significant growth-inducing factor. According to Natural Resources Canada, around half of the energy consumed in a data center is utilized by computing servers, with a further 40% being attributed to cooling these servers. Apart from this, the climatic conditions of the cities in Canada are recorded with an annual temperature of 42.8 °F. This, in turn, eliminates the need for cooling systems in the data centers, thereby minimizing operational costs.
The market research report has provided a comprehensive analysis of the competitive landscape. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:
(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
Report Features | Details |
---|---|
Base Year of the Analysis | 2024 |
Historical Period | 2019-2024 |
Forecast Period | 2025-2033 |
Units | Billion USD |
Scope of the Report | Exploration of Historical Trends and Market Outlook, Industry Catalysts and Challenges, Segment-Wise Historical and Future Market Assessment:
|
Components Covered |
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Data Center Types Covered | Large Data Centers, Small and Medium-sized Data Centers, Enterprise Data Centers |
End Uses Covered | Cloud Providers, Colocation Providers, Enterprises, Hyperscale Data Centers |
Applications Covered | BFSI, IT and Telecom, Media and Entertainment, Healthcare, Government and Defense, Retail, Research and Academic, Others |
Regions Covered | Asia Pacific, Europe, North America, Latin America, Middle East and Africa |
Countries Covered | United States, Canada, Germany, France, United Kingdom, Italy, Spain, Russia, China, Japan, India, South Korea, Australia, Indonesia, Brazil, Mexico |
Companies Covered | Alfa Laval AB, Asetek A/S, Asperitas, Chilldyne, CoolIT Systems Inc., Fujitsu Limited, Green Revolution Cooling Inc., Iceotope, Lenovo Group Limited, Rittal GmbH & Co. KG, Schneider Electric SE, Vertiv Group Corp., etc. |
Customization Scope | 10% Free Customization |
Post-Sale Analyst Support | 10-12 Weeks |
Delivery Format | PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request) |
Key Benefits for Stakeholders:
The data center liquid cooling market was valued at USD 3.5 Billion in 2024.
The data center liquid cooling market is projected to exhibit a CAGR of 18.56% during 2025-2033, reaching a value of USD 16.5 Billion by 2033.
The market is primarily driven by the growing need for energy-efficient cooling systems, increasing data center density, and the adoption of advanced cooling technologies such as immersion and AI-powered cooling. Rising demand for sustainable IT infrastructure and favorable regulatory initiatives to improve energy efficiency further drive data center liquid cooling market growth globally.
North America currently dominates the data center liquid cooling market, accounting for the largest share in 2024. This dominance is supported by robust hyperscale data center developments, major tech investments, and advanced liquid cooling innovations across the region.
Some of the major players in the data center liquid cooling market include Alfa Laval AB, Asetek A/S, Asperitas, Chilldyne, CoolIT Systems Inc., Fujitsu Limited, Green Revolution Cooling Inc., Iceotope, Lenovo Group Limited, Rittal GmbH & Co. KG, Schneider Electric SE, and Vertiv Group Corp.