Data Center Liquid Cooling Market

Global Data Center Liquid Cooling Market Size:

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.

Market Size & Forecasts:

• Data center liquid cooling market was valued at USD 3.5 Billion in 2024.
• The market is projected to reach USD 16.5 Billion by 2033, at a CAGR of 18.56% from 2025-2033.

Dominant Segments:

• Component: Solution (direct liquid cooling and indirect liquid cooling) holds the biggest market share because of their exceptional effectiveness in heat removal. The solution surpasses traditional air cooling in effectiveness, providing improved thermal management, energy efficiency, and capability to manage high-density workloads within contemporary data centers.
• Data Center Type: Large data centers dominate the market due to their ability to facilitate high-density computing, extensive data storage, and scalability. They provide effective resource management, backup solutions, and improved dependability, rendering them crucial for meeting the increasing needs for data processing and cloud services.
• End Use: Enterprises hold the largest market share due to their growing demand for strong, scalable IT infrastructure to facilitate operations, data storage, and security. As companies undergo digital transformation, they need sophisticated solutions to manage intricate tasks, enhance productivity, and maintain operational stability in a competitive landscape.
• Application: IT and telecom represent the largest segment owing to their significant need for dependable, scalable infrastructure that can accommodate extensive data processing, network traffic, and communication systems. These sectors need effective, secure, and high-performing solutions to handle increasing workloads and guarantee ongoing connectivity and service accessibility.
• Region: North America holds the biggest market share owing to its strong technological infrastructure, significant investments in advanced solutions, a high concentration of top companies, and an increasing need for energy-efficient systems. The area's emphasis on sustainability and innovation enhances its market leadership, establishing it as a worldwide center for progress.

 Key Players:

• The leading companies in 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.

Key Drivers of Market Growth:

• Increasing Data Center Density: The growing demand for liquid cooling solutions is driven by the expanding number of data centers handling higher workloads due to cloud services, big data, and artificial intelligence (AI) technologies. Liquid cooling effectively manages the heat generated by dense server environments, ensuring performance stability and optimizing infrastructure use.
• Government Regulations: Government regulations and compliance requirements are driving the adoption of liquid cooling in data centers. As energy usage and carbon emissions regulations tighten, liquid cooling systems, being more energy-efficient and environmentally friendly, help data centers meet sustainability standards, reduce operational costs, and comply with environmental mandates.
• Hybrid Cooling Solutions Demand: The increasing need for hybrid cooling solutions is supporting the market growth, as data centers face complex thermal management challenges from high-performance computing and AI tasks. Hybrid systems combining air and liquid cooling offer enhanced flexibility, optimizing energy usage and cooling efficiency for both standard and high-density workloads.
• Rise of AI and ML: The rapid growth of AI and machine learning (ML) is driving the demand for liquid cooling in data centers. These technologies require significant computational power and specialized hardware, which generate substantial heat. Liquid cooling effectively manages the heat, ensuring optimal performance and preventing overheating and hardware damage.
• Environmental Sustainability: Growing environmental awareness and stricter carbon emission policies are encouraging data centers to adopt eco-friendly solutions. Liquid cooling is more energy-efficient in comparison to air cooling, offering better heat dissipation and potential for waste heat recycling. This helps reduce energy usage, carbon emissions, and supports sustainability goals and regulatory compliance.
• Technological Advancements: Innovations in cooling technologies, such as direct-to-chip, immersion, and cold plate systems, are improving efficiency and reliability. Advanced dielectric fluids enhance heat dissipation, while closed-loop systems reduce maintenance and extend lifespan. These advancements increase the scalability and flexibility of liquid cooling, meeting the rising demands of high-performance workloads.

Future Outlook:

• Strong Growth Outlook: The data center liquid cooling market is poised for strong growth due to increasing need for energy-efficient cooling solutions, advancements in technology, and the rise of high-performance computing. As data centers expand and handle more complex workloads, the need for effective thermal management solutions continues to drive the market demand.
• Market Evolution: The data center liquid cooling market is evolving rapidly, attributed to the need for higher efficiency, sustainability, and performance in managing heat. Innovations in cooling technologies, combined with growing demands for data processing, are shaping the future of the market, leading to widespread adoption across industries with increasing energy-consciousness.

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.

Data Center Liquid Cooling Market Trends:

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.

Data Center Liquid Cooling Market Growth Drivers:

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.

Data Center Liquid Cooling Market Segmentation:

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
  • Direct Liquid Cooling
  • Indirect Liquid Cooling
• Services
  • Design and Consulting
  • Installation and Deployment
  • Support and Maintenance

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
• Small and Medium-sized Data Centers
• Enterprise Data Centers

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:

• Cloud Providers
• Colocation Providers
• Enterprises
• Hyperscale Data Centers

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:

• BFSI
• IT and Telecom
• Media and Entertainment
• Healthcare
• Government and Defense
• Retail
• Research and Academic
• Others

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
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa

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.

Leading Key Players in the Data Center Liquid Cooling Industry:

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:

• 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.

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Data Center Liquid Cooling Market News:

• June 2025: Shell launched DLC Fluid S3, a direct liquid cooling solution for AI and high-performance computing, claiming up to 27% improvement in power usage effectiveness over air cooling. The glycol-based fluid offers long-term corrosion protection and over six years of service life, supporting next-gen data center systems. It aligns with OCP standards and is compatible with key server materials.
• June 2025: Trane Technologies enhanced its liquid cooling systems for data centers with scalable Coolant Distribution Units (CDUs) ranging from 2.5MW to 10MW. The upgrades support high-density AI workloads while improving energy efficiency and sustainability. Trane also offers lifecycle services and smart monitoring to optimize performance and reduce operational costs.
• June 2025: KDDI and HPE announced a new AI data center in Osaka, set to launch in early 2026, powered by Nvidia’s GB200 NVL72 platform with direct liquid cooling. The facility will support startups and enterprises through KDDI’s WAKONX platform for low-latency, energy-efficient AI computing. It aims to drive Japan’s AI innovation with sustainable, high-performance infrastructure.
• February 2024: Aligned, a data center firm, has launched a new liquid cooling system, which is specifically designed to support high-density compute requirements and supercomputers.
• February 2024: SK Enmove announced it had signed a Memorandum of Understanding (MOU) on cooperation of next-generation cooling and solutions with SK Telecom and Precision Liquid Cooling Iceotope Technologies.
• January 2024: Modine, a global leader in innovative thermal management solutions, announced that it purchased the intellectual property and other specific assets of TMG Core, a specialist in single- and two-phase liquid immersion cooling technology for data centers with high-density computing requirements.

Data Center Liquid Cooling Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the data center liquid cooling market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global data center liquid cooling market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the data center liquid cooling industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.