Data Center Cooling Market Overview

The global data center cooling market is witnessing rapid expansion, fueled by rising demand for energy-efficient cooling systems, the swift growth of hyperscale facilities, and the increasing adoption of cloud computing, artificial intelligence (AI), and IoT-based applications. The market is valued at approximately USD 15.8 billion in 2025 and is projected to reach USD 44.6 billion by 2033, reflecting a strong CAGR of 14.3% over the forecast period.

As data centers handle ever-larger volumes of processing, excessive heat generation has become a critical challenge, making advanced cooling technologies essential to maintain performance, extend hardware lifespan, and reduce energy consumption. Market growth is being supported by the growing adoption of innovative solutions such as liquid cooling, immersion cooling, and free cooling techniques. Rising power density in data centers and the need for energy-optimized infrastructure remain key factors propelling industry demand. Moreover, as enterprises and governments focus on developing sustainable data centers and achieving carbon neutrality, the push for eco-friendly cooling solutions is accelerating.

Data Center Cooling Market Drivers and Opportunities

Rising Demand for Energy-Efficient Cooling Solutions Is Anticipated to Lift the Data Center Cooling Market During the Forecast Period

​The growing energy consumption by data centers is triggering demand for energy-efficient cooling solutions. With accelerated growth in cloud computing, artificial intelligence (AI), and big data analytics, data centers are processing more workload, generating more heat, and thereby creating higher cooling loads. Previous cooling solutions, including air conditioning and traditional air-based cooling, are no longer adequate to address higher power densities effectively. Consequently, organizations are undergoing a transition towards innovative cooling technologies like liquid cooling, immersion cooling, and AI-optimized cooling to improve energy efficiency and sustainability. Energy efficiency has become a prime concern among data centers, with cooling subsystems consuming a high percentage of overall energy consumption. The government and regulators globally are mandating robust energy efficiency regulations, including the EU Energy Efficiency Directive and U.S. Environmental Protection Agency (EPA) guidelines, compelling data centers to adopt low-energy, high-efficiency cooling solutions. Furthermore, usage of renewable energy-based cooling and free cooling technologies, leveraging natural air or water supplies to cut energy consumption, is also propelling growth in the market.

Expansion of Hyperscale and Edge Data Centers Is a Vital Driver for Influencing the Growth of the Global Data Center Cooling Market

The growth of hyperscale and edge data centers is a prime growth driver for the data center cooling industry. With greater adoption of cloud computing, artificial intelligence (AI), the Internet of Things (IoT), and big data analytics, there is an increased need for high-performance data centers with high processing capacities to manage large volumes of data decisively. Hyperscale data centers owned by large cloud service providers and technology giants call for sophisticated cooling solutions to deal with high temperature loads generated by large-scale computing processes. As more businesses shift to cloud services, more hyperscale facilities are coming up, thus promoting demand for efficient cooling technologies still further. Simultaneously, edge computing transformation is reorienting data center dynamics. Instead of centralized large data centers, edge data centers are positioned to process data near end-users, cutting down latency and enhancing real-time processing of data in applications like 5G networks, self-driving vehicles, and intelligent cities. The small, decentralized data centers used in these contexts are usually space-restricted, with compelling needs for high-efficiency cooling solutions with reduced requirements of space and handling diverse climatic conditions. Liquid cooling, direct-to-chip cooling, and modular cooling solutions are gaining momentum as edge data centers are increasingly adopted. With digital transformation gaining momentum worldwide, growth in hyperscale and edge data centers is promoting growth in innovative, eco-friendly, and high-performance cooling solutions.

Integration of AI and Automation in Cooling Systems Is Poised to Create Significant Opportunities in The Global Data Center Cooling Market

The convergence of artificial intelligence (AI) and automation in cooling systems is revolutionizing the data center cooling industry, facilitating efficiency, sustainability, and cost optimization. As data centers continue to become more complex, conventional cooling solutions are becoming ineffective and energy wasteful, leading data center operators to adopt intelligent, automated cooling solutions. AI-based cooling systems leverage machine learning algorithms, real-time data analytics, and predictive maintenance to maximize cooling performance, lower energy consumption, and enhance Power Usage Effectiveness (PUE). Through real-time monitoring of temperature, humidity, airflow, and equipment performance, AI-based systems can dynamically change cooling operations to match a data center’s evolving requirements, maximizing efficiency. One of AI-based cooling’s defining features is its ability to detect and prevent temperature inefficiency ahead of its occurrence. Automated cooling management solutions can sense heat buildup, detect airflow deviations, and adjust fan speeds and cooling fluid distribution in real-time, keeping energy waste and operating expenses to a minimum. Google and Microsoft are among the major corporations to adopt AI-powered cooling solutions, reducing their data centers’ energy usage by as much as 40% on cooling alone.

Data Center Cooling Market Scope

Data Center Cooling Market Report Segmentation Analysis

The Global Data Center Cooling Market Industry Analysis Is Segmented by Component, by Solution, by Service, by Cooling Technique, by End-Use Industry, And by Region.

The solution segment is anticipated to hold the highest share of the global Data Center Cooling Market during the projected timeframe.

Based on component, the global data center cooling market is segmented into Solution and Services. Among these, the Solution segment dominates the market with 63.2% of market share. The rising use of cutting-edge cooling technologies like liquid cooling, immersion cooling, and AI-driven thermal management systems is driving the market growth.  The demand for effective and dependable cooling systems has increased as data centers develop to handle the increasing demands from big data analytics, cloud computing, and artificial intelligence.  Businesses are making significant investments in energy-efficient cooling systems in order to lower operating expenses, improve server performance, and adhere to sustainability standards.

The Air Conditioners Segment Is Anticipated to Hold the Highest Share of the Market Over the Forecast Period.

On the basis of solution, the global data center cooling market is segmented into Air Conditioners, Precision Air Conditioners, Chillers, Air Handling Units, and Others.  In 2025, Air Conditioners dominate the market, driven by their widespread adoption, cost-effectiveness, and ability to efficiently manage heat loads in data centers. Traditional air conditioning (CRAC) and air handling (CRAH) solutions are still a popular option with small, medium, and large data centers, to provide balanced temperature and air flow management. Increased building of hyperscale and colocation data centers, as well as growth in edge computing centers, has also raised the demand for high-performance air conditioning solutions.

The Installation & Deployment Dominated the Market in 2025 And Is Predicted to Grow at The Highest CAGR Over the Forecast Period.

On the basis of service, the global data center cooling market is segmented into Installation & Deployment, Support & Consulting, and Maintenance Services. The Installation & Deployment leads the market with growth fueled by new data center builds, hyperscale data center expansions, and greater adoption of innovative cooling solutions. With more business moving to cloud services, AI-intensive workloads, and edge computing, there has been greater demand for energy-efficient cooling infrastructure, with more investments going into proper installation and deployment of cooling solutions. Businesses need skilled deployment services to run their cooling infrastructure at maximum performance, with less energy consumption and fewer operational risks.

The Room-Based Cooling Segment Is Predicted to Grow at The Highest CAGR Over the Forecast Period.

On the basis of cooling technique, the global data center cooling market is segmented into Room-Based Cooling, Rack-Based Cooling, and Row-Based Cooling. The Room-Based Cooling accounts for the highest share of the market, as it is cost-saving, scalable, and highly suitable in conventional data centers. It entails cooling the server room as a whole by utilizing Computer Room Air Conditioning (CRAC) and Computer Room Air Handling (CRAH) units, maintaining uniform temperature control and heat transfer throughout the facility. As a result of its performance in cooling large data centers efficiently, room-based cooling continues to be the choice of preference among businesses, colocation centers, and hyperscale data centers.

The following segments are part of an in-depth analysis of the global data center cooling market:

Data Center Cooling Market Share Analysis by Region

North America Is Projected to Hold the Largest Share of the Global Data Center Cooling Market Over the Forecast Period.

In 2025, North America leads with a 32.6% stake in the overall data center cooling market. The region's high concentration of hyperscale data centers, adoption of cloud computing, and major technology players are fueled with growth. The region houses major cloud service providers, colocation data centers, and IT players including Google, Microsoft, Amazon Web Services (AWS), and Meta, expanding data center infrastructure relentlessly. With increased adoption of artificial intelligence (AI), 5G technology, and edge computing, demand has grown for scalable and efficient cooling solutions. Meanwhile, increased adoption of green data centers has inclined companies to invest in energy-saving cooling methods, including liquid cooling, free cooling, and AI-based thermal management solutions, to cut down energy consumption and carbon footprints. The major driver of North America's leadership role lies in its stringent regulation and sustainability initiatives to enhance energy efficiency in data centers. Organizations are increasingly deploying high-performance cooling solutions to improve power usage effectiveness (PUE) and minimize operational costs. The growth of hyperscale data center expansion projects and government investments in data center infrastructure are also contributing towards increased growth in the data center cooling market accordingly. With robust innovation and sustainability initiatives, North America will continue to lead the data center cooling market in the coming years.

At the same time, the Asia-Pacific (APAC) region is anticipated to experience the highest CAGR over the forecasting period. The accelerated growth in data center investments in China, India, Japan, and Southeast Asia, as well as the development of 5G networks and mounting adoption of clouds, are driving demand for leading-edge cooling solutions. As APAC continues to become a major digital hub, it will lead to strong growth in data center cooling demand.

Data Center Cooling Market Competition Landscape Analysis

Some of the major players in the data center cooling market are Vertiv Group Corp. and Schneider Electric, Fujitsu, Mitsubishi Electric Corporation, and Asetek, Inc. The players are more inclined towards different growth opportunities such as new product launches, collaborations & partnerships, and agreements to gain an upper hand over their competitors.

Global Data Center Cooling Market Recent Developments News:

●        In March 2025, Vertiv Group Corp. joined with Tecogen Inc., an American clean energy firm with expertise in ultra-efficient, clean on-site power, heating, and cooling solutions. The union enables Vertiv to add Tecogen's innovatively advanced natural gas-powered chilling solutions to Vertiv's data center solutions worldwide. The new solution will address power constraints and enable large-scale adoption of AI technologies. The new addition increases Vertiv's already comprehensive line of industry-leading cooling solutions.

●        In December 2024, Schneider Electric launched new AI-ready data center solutions to address the energy and sustainability requirements of AI networks. With NVIDIA, Schneider Electric revealed a liquid-cooled AI cluster reference design with 132 kW capacity per rack. The Galaxy VXL line of compact uninterruptible power supply (UPS) with 52% space reduction and high power density, also specifically designed for AI and data centers, provides high-efficiency power in less space.

The Global Data Center Cooling Market Is Dominated by A Few Large Companies, Such As

●        Asetek, Inc.

●        Climaveneta Climate Technologies PVT. LTD.

●        Coolcentric

●        Dell Inc.

●        Fujitsu

●        Hitachi, Ltd.

●        Johnson Controls

●        Mitsubishi Electric Corporation

●        Nortek Air Solutions, LLC

●        NTT Ltd.

●        Rittal GmBH & Co. KG

●        Schneider Electric

●        STULZ GMBH

●        Vertiv Group Corp.

●        Others