Data Center Liquid Cooling Market to Hit 16.5 Billion at CAGR of 18.56% by 2033

Market Overview:

The data center liquid cooling market is experiencing rapid growth, driven by Rising Power Density in Data Centers, Sustainability and Energy Efficiency Goals and Government Incentives and Green Data Center Policies. According to IMARC Group's latest research publication, "Data Center Liquid Cooling Market Report by Component (Solution, Services), Data Center Type (Large Data Centers, Small and Medium-sized Data Centers, Enterprise Data Centers), End Use (Cloud Providers, Colocation Providers, Enterprises, Hyperscale Data Centers), Application (BFSI, IT and Telecom, Media and Entertainment, Healthcare, Government and Defense, Retail, Research and Academic, and Others), and Region 2025-2033", 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.

This detailed analysis primarily encompasses industry size, business trends, market share, key growth factors, and regional forecasts. The report offers a comprehensive overview and integrates research findings, market assessments, and data from different sources. It also includes pivotal market dynamics like drivers and challenges, while also highlighting growth opportunities, financial insights, technological improvements, emerging trends, and innovations. Besides this, the report provides regional market evaluation, along with a competitive landscape analysis.

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Our report includes:

• Market Dynamics
• Market Trends And Market Outlook
• Competitive Analysis
• Industry Segmentation
• Strategic Recommendations

Growth Factors in the Data Center Liquid Cooling Industry:

• Rising Power Density in Data Centers

One of the major motivating factors to the rise use of liquid cooling systems is the power density dominating contemporary data centers. With the transition to work based on AI, machine learning, and high-performance computing (HPC), servers are becoming hotter than old air cooling schemes can effectively cool. The current data centers ranges up to 20-30 kW per rack and even up to 50 kW per rack on AI-demanding. The limits of air cooling efficiency occurs at 15 kW per rack and above, thus liquid cooling is no longer optional. Such companies as Meta and Google are already testing or implementing liquid-cooled racks to stay abreast of the compute needs. The change becomes particularly valuable to hyperscale players and colocation operators with GPU ensembles or those that run on ASIC-based nodes. The extreme thermal load management has become a market advantage, with the advent of AI models, immersive gaming, and real-time analytics, and liquid cooling is in the front seat of data center infrastructure transformation.

• Sustainability and Energy Efficiency Goals

Liquid cooling is becoming increasingly popular as data centers are under pressure to lower energy expenditure and environmental cost. Depending on the climate or the high-density compute environment, traditional air cooling techniques may prove highly wasteful with regard to energy. Comparatively, liquid cooling has more concentrated thermal control with less dependency on chillers or fans in turn equivalent to lower power usage effectiveness (PUE). There are increasingly more hyperscalers and enterprise data centers being willing to make a commitment on sustainable cooling. Indicatively, Microsoft has deployed immersed liquid-cooled servers in multiple locations, and reported up to 15 percent increment in efficiency. There is also the role of the government and international efforts, for instance the European Union promotion of carbon-neutral data centers, and Indian Data Centre Policy incentives based on energy-efficient design. As ESG reporting and concerns about the cost of electricity are under review, liquid cooling can provide a solution to enhance thermal performance and reach climate targets and control costs of operation.

• Government Incentives and Green Data Center Policies

The global governments motivate their population to use liquid cooling by providing grants, infrastructure subsidies, and environmental certifications to help build greener data centers. It has been especially energetic within countries with limited land and electricity such as Singapore which has required new data centers to meet high energy efficiency standards. SingaporeInfocomm Media Development Authority (IMDA) has set a current requirement of PUE of less than 1.3 in new buildings, prodding operators in the direction of direct-to-chip and immersion solutions. In the same manner, the U.S. Department of Energy provides funds to businesses that investigate the advanced cooling solutions as the part of the energy innovation programs. Green certifications and local taxes advantages are also motivating operators in Europe to retro-fit their existing liquid-based cooling systems. These incentives are not only encouraging compliance, they are facilitating the broader and more rapid roll out of high-density compute in AI/edge deployments. With regulation becoming stricter and the price of energy increasing, governments are fuelling the investment in cooling systems that favour performance, sustainability and adherence to regulation that has become industry wide.

Key Trends in the Data Center Liquid Cooling Market 

• Expansion of AI and HPC Workloads

Artificial intelligence (AI), machine learning, and high-performance computing (HPC) are completely transforming the construction of data centers (as well as their cooling systems). Such workouts require tremendous processing ability that would translate into high density cooling that the standard air systems cannot manage. By way of example, a large language model can be trained with thousands of GPUs, co-located on racks producing up to 50 kW of thermal load. The cooling systems that can provide the necessary thermal efficiency are liquid cooling, especially direct-to-chip and immersion types. Companies such as NVIDIA have developed AI servers that boast in-built liquid-cooling capacities and businesses such as Equinix and Digital Realty are also creating liquid-ready colo spaces. The pattern is gaining momentum with AI being the focus in such industries as financial sector, health care as well as driverless vehicles. In terms of generative AI or real-time data analytics processes, liquid cooling is becoming a basis of facilitating high-performance infrastructure capable of matching the requirements of reliability, uptime and sustainability thresholds.

• Shift Toward Immersion Cooling

Immersion cooling is becoming popular as the most effective and space-saving immersion cooling system than the conventional rack cooling strategies. Under this technique, the servers are entirely immersed in a non-conductor of electricity but a thermo-conductive medium, providing fast heat-removal in a low-energy consumption capability. Both hyperscalers and startups are demanding this kind of technology to utilize dense and edge deployments. The implementation of the two-phase immersion cooling in the Quincy data center by Microsoft indicated the turning point demonstrating that using this method was possible at scale. Equally, other companies, such as Submer and Asperitas are facilitating containerized immersion cooling solutions that are plug-and-play. Immersion system is able to save cooling energy up to 90 percent as compared to air cooling and increase the duration of the hardware serviceable by reducing the thermal fluctuations. Its compact, environmental-friendly, and scalable nature with the proliferation of modular data centers, particularly, in space-constrained urban or distant locations makes immersion cooling ideal in taking advantage of the growing demand to distribute computing capabilities.

• Liquid Cooling as a Service (LCaaS)

Emergence of Liquid Cooling as a Service (LCaaS) is changing the way operators of data center access and implement advanced cooling systems. Operators no longer need to make heavy investments in making retrofits in-house or even redesigning an infrastructure; solution providers can take care of the designing, installation, and operational aspects of these liquid cooling structures. Firms such as Vertiv and Iceotope are providing LCaaS models in which the hardware, monitoring and support are bundled as subscription or pay-as-you-go services. This is especially appealing to small operators or businesses that want to expand but not at the same level because of capital-intensive implementations. It also eases access to such technologies as direct-to-chip or rear-door heat exchangers, and allows easy competitiveness without having to engineer complexity. This creates the ability to test and tune cooling operations without making long-term infrastructure commitments as workload requirements shift fast. It is part of a wider shift to operate IT as opex-friendly, service-oriented and in a cloud-enabled data center world.

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Leading Companies Operating in the Global Data Center Liquid Cooling Industry:

• 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.

Data Center Liquid Cooling Market Report Segmentation:

Breakup By Component:

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

Solution represents the largest segment. Solutions encompass a wide range of integrated systems and technologies essential for effective liquid cooling, making them the predominant choice among data center operators seeking comprehensive cooling strategies.

Breakup By Data Center Type:

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

Large data centers account for the majority of the market share as large data centers have higher power densities and cooling requirements.

Breakup By End Use:

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

Enterprises exhibit a clear dominance in the market. Enterprises, with their significant investments in IT infrastructure and reliance on data-intensive applications, prioritize advanced cooling solutions to ensure optimal performance and operational efficiency.

Breakup By Application:

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

IT and telecom hold the biggest market share. The IT and Telecom sectors are characterized by high data traffic and power demands, necessitating efficient cooling solutions to manage the heat generated by their extensive hardware setups.

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 enjoys the leading position in the data center liquid cooling market. North America is home to a large number of hyperscale data centers and tech giants that are early adopters of innovative cooling technologies, driving significant growth in the liquid cooling market.

Research Methodology:

The report employs a comprehensive research methodology, combining primary and secondary data sources to validate findings. It includes market assessments, surveys, expert opinions, and data triangulation techniques to ensure accuracy and reliability.

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