The global data center cooling system market size was valued at USD 5778.56 million in 2025 and is projected to grow from USD 6535.55 million in 2026 to USD 17497.78 million by 2034, registering a CAGR of 13.1% during the forecast period from 2026 to 2034. North America dominated the data center cooling system market with a market share of 38.7% in 2025.
Data center cooling refers to the process of temperature monitoring and maintenance in a data center environment. The only aim is to make sure the electronic devices including servers, networking equipment, and storage units run at the best possible conditions. Additionally, effective cooling systems are necessary in order to avoid overheating because it could result in equipment failure.
The expansion in the world data center cooling system market will be fueled by the rising number of data centers and efforts from governments towards energy-efficient data centers. The necessity to bridge the water shortage gap has also led to the implementation of data center cooling technologies.
The cooling industry for data centers is guided by numerous regulations with governments around the globe highlighting effective data center incident response and recovery plans. Cooling facilities have a key function in avoiding overheating of equipment and maintaining the operation of data centers during and after incidents.
Vertiv Group Corp., Schneider Electric, Fujitsu, Mitsubishi Electric Corporation and Asetek, Inc drives the data center cooling system market. The companies are emphasizing different strategic initiatives such as new product development, partnerships & collaborations, and agreements in order to take a competitive edge over their competitors. Some examples of such initiatives are mentioned below.
The above graph indicates the PUE efficiency from 2020 to 2024, with values fluctuating from 1.55 to 1.58. As PUE is considered as one of the important measures that describes how energy efficient a data center is more precisely. The lesser the PUE value is the more the energy efficient. The downward trend of PUE in 2022 indicates the significant improvement in cooling efficiency. The PUE efficiency rise in 2023, may be a result of operation or climatic conditions and again the slight regain in 2024 shows the renewed energy for efficiency improvements. These small changes of the PUE have a direct impact on the data center cooling, because they indicate the continuous demand for more efficient and cost-effective technologies. However, the data centers propel to decrease the PUE, for more sophisticated cooling technologies, such as liquid cooling, immersion cooling and AI-based thermal management increases as all of them are important for enabling operators to achieve both performance and sustainability targets.
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Development of Two-Phase Liquid Cooling Technologies
The data center cooling system market trends show that higher server power densities and heat loads are shifting cooling technology toward two-phase liquid systems that remove heat through liquid-to-vapor phase changes. This transition can reduce dependence on compressor-based air cooling, with an ARPA-E-supported IBM project targeting more than 90% lower cooling energy consumption and the potential to eliminate water use compared with conventional compressor-based air cooling. The outcome is greater development of two-phase cooling architectures for high-performance computing and AI data centers where conventional air systems face thermal limits.
Adoption of Rear-Door Heat Exchangers for High-Density Racks
The data center cooling system market trends show that concentrated heat loads from high-density racks are shifting operators toward rear-door heat exchangers that remove heat directly from server exhaust before it enters the data-center space. This transition supports higher rack densities while reducing the thermal burden on room-level cooling systems, and the U.S. Department of Energy identifies rear-door heat exchangers as a liquid-cooling approach that captures server heat close to the rack source. The outcome is greater adoption of rack-level cooling for AI and high-performance computing environments, with ASHRAE guidance identifying rear-door heat exchangers as suitable for 50–100+ kW rack densities.
Surging Data Center Power Consumption and Expansion of Modular Cooling Solutions Drive Market
Surging data center power consumption is increasing the thermal management requirements of data center facilities, creating stronger demand for efficient cooling systems. The International Energy Agency estimates that data centers consumed 415 TWh of electricity in 2024, equal to around 1.5% of global electricity consumption, and projects demand to reach about 945 TWh by 2030. Higher power densities from AI and high-performance computing therefore increase cooling requirements and encourage operators to deploy advanced temperature-control infrastructure. For example, AI-focused facilities require specialized cooling capacity to manage the heat generated by high-density GPU servers.
Expansion of modular cooling solutions is strengthening the supply of scalable cooling infrastructure for data centers with changing capacity requirements. Uptime Institute notes that modular construction allows capacity to be added in separate blocks over time, with each expansion supported by self-contained infrastructure such as cooling equipment. This approach allows operators to match cooling capacity with incremental IT deployment while reducing the need for oversized infrastructure during initial construction. For example, a data center can add modular chiller or cooling units as additional server halls become operational, supporting phased capacity growth.
Water Constraints and Space Limitations Restrain Data Center Cooling System Market Expansion
Water consumption and availability constraints can limit the use of water-based cooling systems, particularly in water-stressed regions. A U.S. Department of Energy-supported Lawrence Berkeley National Laboratory report estimates that U.S. data centers could directly consume 145–275 billion liters of water annually by 2028, up from about 70–90 billion liters in 2024. These requirements can increase operating costs and restrict new cooling installations where water availability is limited.
Space constraints in high-density data centers make it difficult to accommodate additional cooling equipment, piping, heat exchangers, and supporting infrastructure. The IEA reports that cooling can account for about 7% of electricity use in efficient hyperscale data centers and more than 30% in less-efficient enterprise facilities, highlighting the infrastructure required to manage thermal loads. Limited space can complicate cooling upgrades, increase installation complexity, and slow adoption of advanced data center cooling systems.
Two-Phase Liquid Cooling Technologies and Rear-Door Heat Exchangers Create New Market Opportunities
Hyperscale data centers, AI computing facilities, data-center operators, and cooling-system manufacturers can benefit from two-phase liquid cooling for high-density computing environments. Companies such as 3M and Schneider Electric have developed liquid-cooling technologies, creating revenue through specialized cooling systems, coolants, infrastructure upgrades, and service contracts while supporting data center cooling market growth.
Data-center operators, colocation providers, and server manufacturers can benefit from rear-door heat exchangers that remove heat directly from high-density racks without major changes to existing facility layouts. Companies such as Vertiv and CoolIT Systems offer rear-door and liquid-cooling solutions, creating revenue through retrofit projects, heat-exchanger equipment, installation, and maintenance services while supporting data center cooling market growth.
High Energy Demand and Rising Thermal Density Hinder Data Center Cooling System Market Growth
High energy demand from cooling infrastructure increases operating pressure on data center operators and limits the efficiency gains available from new facilities. The International Energy Agency estimates that global data center electricity consumption could reach around 945 TWh by 2030, more than doubling from 2024 levels, increasing the need for highly efficient cooling technologies.
Rising thermal density from AI accelerators and high-performance computing makes conventional cooling configurations less effective and increases the need for liquid or hybrid systems. NVIDIA’s GB200 NVL72 rack-scale system, for example, integrates 72 Blackwell GPUs in a single rack and requires liquid cooling, illustrating how AI workloads are creating new deployment and retrofit requirements for data center cooling providers.
The computer room air conditioning & computer room air handlers segment dominated the market with a market share of 57.8% in 2025. These systems provide controlled temperature and humidity management for data center environments, supporting reliable operation of computing equipment. The in-row and in-rack cooling segment places cooling equipment closer to high-density computing loads, while the others segment covers additional air-based cooling solutions.
The in-row and in-rack cooling segment is expected to grow at the fastest CAGR of 14.86% during the forecast period 2026–2034. The computer room air conditioning & computer room air handlers segment remains suitable for broader data center cooling requirements, while the others segment serves specific facility and thermal-management needs.
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The direct liquid cooling segment dominated the market with a market share of 64.3% in 2025. Direct liquid cooling transfers heat from computing components through a liquid-based cooling system and supports high-density computing environments. The immersion cooling segment places computing hardware in or around a specialized cooling fluid to manage heat directly.
The immersion cooling segment is expected to grow at the fastest CAGR of 19.26% during the forecast period 2026–2034. The direct liquid cooling segment continues to support data centers seeking efficient heat removal from high-performance computing equipment.
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The North America data center cooling system market held the dominant position, accounting for 38.7% of the market share in 2025. The region benefits from a large concentration of data centers, increasing cloud computing activity, and high cooling requirements from AI and high-performance computing infrastructure. The U.S. data center cooling system market is supported by projections from the U.S. Department of Energy that data centers could consume 649 TWh of electricity in 2030, equivalent to 11.8% of total U.S. electricity use, increasing the need for efficient cooling systems as computing loads rise.
The Canada data center cooling system market is likely to see additional demand as the Government of Canada projects data-center electricity consumption to increase from 3 TWh in 2025 to 11 TWh in 2030 and 16 TWh by 2035, creating greater requirements for cooling infrastructure.
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The Asia Pacific data center cooling system market is projected to register the fastest CAGR of 15.82% during the forecast period 2026–2034. Rapid data center construction, expanding digital services, and increasing deployment of AI workloads are creating stronger demand for advanced and energy-efficient cooling technologies. The Japan data center cooling system market is supported by IEA projections that data-center electricity consumption could increase by around 15 TWh, or 80%, by 2030 compared with 2024, increasing requirements for advanced cooling infrastructure.
The China data center cooling system market is expected to benefit from projected data-center electricity consumption growth of around 175 TWh, or 170%, by 2030 compared with 2024, strengthening demand for cooling technologies as computing capacity expands.
The South Korea data center cooling system market is supported by government plans to build 8.4 GW of AI data-center capacity, with phased operations scheduled to begin from 2029, creating additional requirements for high-density cooling infrastructure.
The India data center cooling system market is supported by projections that data-center electricity demand could reach approximately 13.56 GW by 2031–32, while increasing adoption of direct-to-chip liquid, adiabatic, and immersion cooling is expected to help manage power and water consumption.
The Europe data center cooling system market accounted for 27.4% of the market share in 2025 and is projected to grow at a CAGR of 12.61% during the forecast period 2026–2034. Demand is supported by investments in sustainable data center infrastructure, energy-efficiency requirements, and the increasing need to manage heat loads in modern computing facilities. The U.K. data center cooling system market is supported by the government’s projection that the country will need at least 6 GW of AI-capable data-center capacity by 2030, about three times the capacity available when the roadmap was published, increasing demand for high-performance cooling systems.
The Germany data center cooling system market is supported by the government’s target to at least double data-center capacity by 2030, driven partly by increasing computing requirements from AI applications and creating additional demand for efficient cooling infrastructure.
The France data center cooling system market is expected to benefit from RTE’s projection that data-center electricity consumption will reach 20 TWh in 2030 and around 35 TWh in 2035, increasing the need for efficient cooling and energy-management technologies.
The data center cooling system market is moderately fragmented, with competition comprising global cooling equipment manufacturers, thermal management companies, data center infrastructure providers, liquid-cooling specialists, HVAC and chiller manufacturers, and specialized technology developers. Based on the player set you provided, Schneider Electric SE, Vertiv Co., Rittal GmbH & Co. KG, STULZ GmbH, and Airedale International Air Conditioning Ltd. are among the leading players; however, a reliable cumulative market-share percentage for these five companies is not publicly disclosed by authoritative, non-market-research sources, so an unsupported figure should not be assigned.
Established players compete primarily on cooling efficiency, thermal performance, system reliability, energy consumption, scalability, product quality, customization, integration capabilities, global service networks, and support for high-density computing environments. Emerging and specialized players in the data center cooling system market ecosystem compete through direct-to-chip and immersion cooling technologies, modular systems, advanced coolant distribution units, compact designs, intelligent thermal monitoring, energy-efficient solutions, and application-specific systems for AI and high-performance computing workloads.
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Author's Details
Research Analyst
Tejas Zamde is a market research professional with over 2 years of experience in the technology, semiconductor, electronics, and automotive sectors. He specializes in market assessment, competitive intelligence, industry analysis, market sizing, demand analysis, and strategic research.
His experience includes analyzing technology trends, market dynamics, regulatory developments, supply-demand patterns, value chains, and competitive landscapes across global and regional markets. He has supported clients with opportunity assessment, customer segmentation, competitive benchmarking, and growth strategy development.
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