The data center chillers market size was valued at USD 3.8 billion in 2025 and is projected to grow from USD 4.07 billion in 2026 to USD 7.10 billion by 2034 at a CAGR of 7.2% during the forecast period (2026–2034). North America dominated the data center chillers market with a market share of 42% in 2025.
Data center chillers are cooling systems used to remove heat generated by servers and IT equipment in data centers. They help maintain optimal temperature and humidity levels, ensuring efficient performance, preventing overheating, and improving the reliability and lifespan of critical infrastructure.
The data center chillers market demand is driven by the rapid expansion of data centers, increasing cloud computing adoption, and rising use of AI and high-performance computing. The growing focus on energy efficiency, sustainability, and reliable data center operations is also supporting data center chillers market growth.
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The market is witnessing a strong shift toward liquid cooling technologies as AI training clusters and high-density computing generate significantly higher heat loads than conventional servers. Liquid cooling improves thermal efficiency while reducing overall energy consumption and rack power limitations. According to the International Energy Agency (IEA), electricity demand from data centers is expected to increase substantially with rapid AI deployment. For example, Vertiv continues to expand its CoolChip liquid cooling portfolio to support next-generation AI infrastructure.
Data center operators are increasingly deploying intelligent cooling systems with AI-based monitoring, predictive controls, and energy optimization to reduce operating costs and meet sustainability targets. Governments are also encouraging energy-efficient digital infrastructure through stricter efficiency standards. The US Department of Energy promotes advanced cooling technologies to improve data center energy performance.
The data center chillers market forecasts a steady investment inflow driven by rapid expansion of data center infrastructure, increasing demand for AI and high-performance computing, and the need for efficient thermal management systems.
Key Investment and Funding Activities in Data Center Chillers, 2026
Sify Technologies
USD 371 million
In June 2026, a member of the World Bank Group, announced a USD 371 million investment in Sify Technologies to support development of next-generation data centers that will require advanced cooling and thermal management infrastructure.
RMZ Corporation
USD 35 billion
In June 2026, the company announced plans to invest over the next five years to expand data center capacity, creating significant demand for large-scale cooling and chiller systems.
Vertiv
Undisclosed
In April 2026, Vertiv announced an investment in expanding its thermal management and cooling solutions portfolio to support high-density and AI-driven data center environments; amount undisclosed.
Rising AI Workloads and Expansion of Hyperscale Data Centers Drives Market
The rapid growth of AI applications and hyperscale data centers is increasing demand for advanced data center chillers capable of handling high-density computing environments. According to the International Energy Agency (IEA), electricity consumption from data centers is expected to rise significantly as AI deployment accelerates, creating higher cooling requirements. This encourages operators to invest in high-capacity, energy-efficient chiller systems that ensure continuous operation and thermal stability. For example, AI-focused hyperscale data centers deploy large-scale chiller infrastructure to maintain optimal server performance under intensive workloads.
The rapid expansion of cloud services and colocation data centers is increasing demand for reliable cooling infrastructure. Enterprises are outsourcing IT infrastructure to third-party providers, accelerating construction of large-scale data centers. Growing digital transformation across industries continues to increase server deployments and cooling requirements. For example, colocation operators such as Equinix, Digital Realty, NTT Global Data Centers, CyrusOne, and QTS Realty Trust are expanding high-density data center capacity to support enterprise cloud migration and AI workloads, creating sustained demand for high-performance chiller systems capable of handling increased rack power densities.
High Energy Consumption and Capital-intensive Infrastructure Restrain Market Expansion
Data center chillers consume significant amounts of electricity to maintain optimal operating temperatures, increasing overall facility operating costs. Rising energy prices and stricter sustainability targets place additional financial pressure on operators, particularly those managing large-scale facilities. This encourages organizations to optimize existing cooling infrastructure before investing in new chiller systems.
The market is also restrained by the high capital investment required for chiller equipment, installation, and integration with data center infrastructure. Complex engineering requirements and long deployment timelines increase project costs and delay implementation. This creates adoption barriers for small and mid-sized operators with limited capital budgets, slowing overall market growth.
Expansion of Data Centers in Emerging Markets and Modernization of Existing Facilities Create Market Opportunities
Rapid digitalization, cloud adoption, and data localization initiatives across emerging economies are accelerating construction of new data centers. This creates a significant growth opportunity for chiller manufacturers, EPC contractors, and HVAC solution providers to supply cooling infrastructure for greenfield projects. Companies such as Daikin Industries and Johnson Controls are expanding their presence in high-growth regions. This supports a future scenario of broader geographic demand and increased cooling infrastructure investments.
Modernization of aging data centers presents another strong opportunity for the market as operators upgrade legacy cooling systems to improve efficiency and support higher rack densities. This creates growth opportunities for equipment manufacturers, retrofit specialists, and cooling solution providers offering advanced chiller technologies. Companies including Carrier Global and Trane Technologies are expanding high-efficiency retrofit solutions for existing facilities. This points toward infrastructure upgrades becoming a major source of recurring market revenue.
Increasing Thermal Density and Power Infrastructure Constraints Challenge Market Growth
The rapid increase in AI and high-performance computing workloads is generating heat densities beyond the capabilities of conventional cooling infrastructure. Data center operators must redesign thermal management systems before expanding capacity, increasing deployment complexity and slowing new installations. For example, AI clusters built around advanced GPU architectures require significantly higher cooling performance than traditional enterprise data centers.
Limited grid capacity and delays in securing power connections are also challenging market growth by postponing new data center developments. Many large-scale projects face extended approval timelines due to inadequate electrical infrastructure, delaying deployment of associated cooling systems. This slows demand for data center chillers despite strong investment in digital infrastructure.
By type, air-cooled chillers accounted for a dominant share of 58% in 2025 due to their easy installation, lower water dependency, and suitability for modular and edge data centers. Growing deployment of decentralized data centers and water conservation initiatives continue to support segment demand.
The water-cooled chillers segment is expected to grow at a CAGR of 7.8% during the forecast period due to their superior cooling efficiency for hyperscale and AI-driven data centers. Rising demand for high-density computing infrastructure continues to accelerate adoption.
Hyperscale data centers accounted for the largest data center chillers market share of 52% in 2025, owing to rapid expansion of cloud computing, AI workloads, and large-scale digital infrastructure. Increasing investments by hyperscale operators continue to strengthen demand for advanced cooling systems.
The edge data centers segment is expected to grow at a CAGR of 9.2% during the forecast period, driven by expanding 5G networks, IoT deployment, and low-latency computing requirements. Growing edge infrastructure investments continue to support market growth.
By cooling technology, air-based cooling accounted for a share of 72% in 2025 due to its widespread deployment, cost-effectiveness, and compatibility with conventional data center infrastructure. Continued modernization of existing facilities supports sustained adoption.
The liquid-based cooling is expected to grow at a CAGR of 10.5% during the forecast period, fueled by increasing AI workloads and high-performance computing applications. Growing demand for efficient thermal management continues to accelerate adoption.
By end user, the IT & telecom segment accounted for a share of 48% in 2025 due to continuous expansion of cloud services, digital platforms, and hyperscale data centers. Rising global data traffic and digital transformation continue to drive cooling infrastructure demand.
The healthcare segment is expected to grow at a CAGR of 7.0% during the forecast period, propelled by increasing digital health adoption, electronic medical records, and medical data storage requirements. Expanding healthcare IT infrastructure continues to support demand for reliable cooling systems.
North America: Market Dominance Driven by Hyperscale Data Center Expansion and AI Infrastructure Investments
The North America data center chillers market accounted for the largest regional share of 42% in 2025, driven by the strong concentration of hyperscale cloud facilities, growing investments in AI computing infrastructure, and increasing deployment of high-density data centers requiring advanced cooling systems. The region benefits from mature digital infrastructure, strong adoption of energy-efficient cooling technologies, and continuous modernization of existing facilities. According to the US Department of Energy, data centers account for a significant share of commercial electricity consumption in the US, reinforcing demand for high-performance cooling solutions.
The US data center chillers market was valued at USD 1.45 billion in 2025, supported by continuous expansion of hyperscale data centers, AI training facilities, and cloud computing infrastructure. Growing investments by leading technology companies in next-generation digital infrastructure continue to increase demand for high-capacity and energy-efficient chiller systems. Federal emphasis on improving data center energy efficiency and reducing operational energy consumption further supports adoption of advanced cooling technologies.
The Canada data center chillers market was valued at USD 200 million in 2025, supported by increasing investments in hyperscale and colocation facilities along with the country's favorable climatic conditions for energy-efficient cooling. Cloud service expansion, growing digital transformation initiatives, and rising demand for sustainable infrastructure continue to strengthen the deployment of advanced chiller systems. Canada's focus on reducing carbon emissions also encourages adoption of high-efficiency cooling technologies.
Asia Pacific: Fastest Growth Supported by Digital Infrastructure Expansion and Rising AI Computing Capacity
The Asia Pacific data center chillers market is expected to grow at a CAGR of 9% during the forecast period, supported by rapid expansion of cloud infrastructure, increasing AI computing capacity, and rising investments in hyperscale data centers across China, India, Japan, and Southeast Asia. Governments continue to promote digital economy initiatives and large-scale data localization programs, accelerating construction of new data centers. According to the International Energy Agency (IEA), Asia Pacific accounts for the largest increase in global electricity demand, reflecting the region's rapidly expanding digital infrastructure.
The China data center chillers market was valued at USD 750 million in 2025, driven by extensive investment in cloud computing infrastructure, AI development, and government-supported digital economy initiatives. Rapid deployment of hyperscale facilities and increasing computing density continue to generate demand for advanced cooling systems. Ongoing expansion of Western computing hubs under national digital infrastructure programs further supports market growth.
The India data center chillers market was valued at USD 300 million in 2025, fueled by rapid growth in cloud services, data localization requirements, and large-scale investments in hyperscale and colocation facilities. Government initiatives such as Digital India and increasing internet penetration continue to accelerate data center construction across major metropolitan cities. Rising enterprise digitalization and AI adoption further strengthen demand for efficient cooling infrastructure.
The Japan data center chillers market was valued at USD 250 million in 2025, supported by modernization of digital infrastructure, increasing adoption of AI-enabled computing, and demand for highly reliable data center operations. Strong focus on energy efficiency, operational resilience, and replacement of aging infrastructure continues to drive deployment of advanced cooling technologies. Expansion of high-density computing environments further increases demand for precision chiller systems.
The data center chillers market competitive landscape is moderately fragmented, with a mix of global HVAC manufacturers, specialized data center cooling providers, and emerging technology-driven startups. Established players mainly compete on energy efficiency, large-scale deployment capabilities, system reliability, and integrated cooling solutions tailored for hyperscale data centers. Emerging players focus on innovation in liquid cooling, compact and modular systems, and AI-enabled optimization to address evolving cooling requirements. The data center chillers market ecosystem is further shaped by advancements in sustainable cooling technologies, system customization, and performance optimization.
November 2025: Schneider Electric expanded its partnership with Switch through a USD 1.9 billion supply capacity agreement, marking the first North American deployment of Uniflair chillers for AI factory infrastructure.
November 2025: Vertiv entered into a strategic collaboration with Caterpillar Inc. to develop integrated power and cooling solutions that improve energy optimization and deployment efficiency for AI data centers.
May 2026: Johnson Controls released its second AI Factory Reference Design Guide, introducing an air-cooled chiller blueprint to support scalable gigawatt-scale AI data center cooling with zero-water thermal management solutions.
February 2026: Johnson Controls launched the YORK YDAM air-cooled magnetic bearing chiller, designed specifically for high-density, multistory AI data centers with cooling capacity of up to 3.5 MW.
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Pavan Warade is a Research Analyst with over 4 years of expertise in Technology and Aerospace & Defense markets. He delivers detailed market assessments, technology adoption studies, and strategic forecasts. Pavan’s work enables stakeholders to capitalize on innovation and stay competitive in high-tech and defense-related industries.
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