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Global Data Center Cooling Market Set for Robust Growth, projected to Reach USD 73.4 Bn by 2035 | Transparency Market Research
Data Center Cooling Market
Market Overview: Data center cooling encompasses a wide range of technologies and systems designed to regulate temperature, humidity, and airflow within data centers. Effective cooling is critical to maintaining server performance, minimizing downtime, extending equipment lifespan, and reducing energy consumption.
As data centers evolve to support cloud platforms, AI-driven analytics, IoT ecosystems, and digital transformation initiatives, thermal management has become a strategic priority. Traditional air-based cooling systems are increasingly complemented-and in some cases replaced-by advanced solutions such as liquid cooling, immersion cooling, free-air cooling, and AI-enabled thermal management systems.
The market is also witnessing a shift toward modular, scalable, and sustainable cooling infrastructures, aligned with global ESG goals and tightening environmental regulations.
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Key Market Growth Drivers
Growing Need for Increasing Efficiency in Data Centers
The explosion of digital data and computational intensity has significantly increased heat loads in modern data centers. Conventional cooling systems account for nearly 40% of total data center power consumption, creating a strong incentive for operators to deploy more efficient solutions.
Innovative cooling technologies-such as in-row cooling, liquid cooling, and AI-powered optimization-help lower Power Usage Effectiveness (PUE) while reducing operational costs. Hyperscale data center operators are increasingly leveraging real-time AI-driven cooling systems to dynamically adjust cooling loads based on workload intensity.
Government initiatives further support this trend. For instance, in January 2025, the UK government announced US$ 17.0 billion worth of data center projects under a new AI Action Plan, highlighting the growing importance of efficient and sustainable cooling infrastructure.
Focus on Energy Efficiency and Sustainability
Sustainability has emerged as a core strategic driver in the data center cooling market. Regulatory pressures, rising electricity costs, and corporate carbon-neutral commitments are pushing operators toward greener cooling solutions.
Advanced cooling systems such as liquid cooling and free-air cooling significantly reduce energy usage and carbon emissions. Initiatives like the U.S. Department of Energy's Better Buildings Challenge encourage data center operators to adopt best practices in energy efficiency and cooling optimization.
Moreover, the use of eco-friendly refrigerants, renewable energy integration, and AI-controlled cooling operations is gaining momentum, enabling operators to meet global environmental standards while improving operational resilience.
Market Challenges and Opportunities
Challenges
• High upfront capital investment for advanced cooling systems
• Integration complexity with legacy data center infrastructure
• Technical expertise required for liquid and immersion cooling deployments
Opportunities
• Rising adoption of AI, HPC, and edge computing
• Growing demand for modular and scalable cooling solutions
• Increasing investments in green data centers and sustainable infrastructure
• Strong growth potential in emerging markets across Asia Pacific and Latin America
Analysis of Key Players and Strategies
Leading companies operating in the global data center cooling market include:
• Vertiv Group Corp.
• Carrier
• Daikin
• Johnson Controls
• Siemens
• Schneider Electric
• GRC
• Dell Inc.
• FLEX LTD
• Modine
• Munters AB
• Boyd
• STULZ GMBH
• Black Box
• Delta Power Solutions
• ALFA LAVAL
• Trane Technologies
• Other Prominent Players
Key Player Strategies
• Investment in liquid and immersion cooling technologies
• Strategic partnerships with data center operators
• Expansion of modular and scalable product portfolios
• Focus on AI-enabled thermal management solutions
• Mergers, acquisitions, and collaborations to strengthen global presence
Recent Developments
• March 2025: Vertiv Group Corp. partnered with Tecogen Inc. to integrate natural gas-powered chiller technology into global data center cooling solutions.
• June 2025: Green Revolution Cooling, Inc. secured new financing from Samsung Ventures, HTS, SK Enmove, and ENEOS, along with a strategic partnership with Samsung C&T.
Segment Outlook
By Product
The Air Conditioners segment dominated the market in 2024, accounting for 35.70% of global revenue. Precision air conditioners play a critical role in maintaining optimal temperature, humidity, and airflow, making them indispensable across most data center environments.
However, liquid cooling and immersion cooling are expected to witness faster growth during the forecast period, driven by rising server densities and AI workloads.
By Cooling Technique
• Room-based cooling
• Rack-based cooling
• Row-based cooling
By Data Center Type
• Large-scale
• Medium-scale
• Small-scale
By Application
Telecom, IT, BFSI, Healthcare, Retail, Energy, Government & Defense, and others.
Regional Outlook
North America
North America led the global data center cooling market in 2024, holding a 39.7% revenue share. The region benefits from a highly advanced digital ecosystem, strong presence of hyperscale cloud providers such as AWS, Microsoft Azure, and Google Cloud, and stringent energy-efficiency regulations.
Programs like the EPA's ENERGY STAR certification for data centers and increased R&D funding for sustainable infrastructure are accelerating the adoption of advanced cooling technologies. Additionally, Canada's cooler climate and access to renewable energy provide ideal conditions for free and green cooling solutions.
Other Regions
• Europe: Strong regulatory framework and focus on sustainability
• Asia Pacific: Fastest-growing region driven by data center expansion in China, India, Japan, and South Korea
• Latin America & Middle East & Africa: Emerging opportunities fueled by digitalization and cloud adoption
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Investment Landscape and ROI Outlook
The data center cooling market presents an attractive investment landscape, supported by double-digit CAGR growth, rising digital infrastructure spending, and increasing regulatory emphasis on sustainability. Investments in advanced cooling technologies offer strong long-term ROI through reduced energy costs, improved system reliability, and regulatory compliance.
Venture capital and strategic investors are particularly focused on liquid cooling startups, AI-driven cooling software, and green data center solutions, making this market a key pillar of future digital infrastructure investments.
Why Buy This Report?
• Gain comprehensive insights into a US$ 73.4 Bn market opportunity
• Identify high-growth segments and emerging technologies
• Analyze competitive strategies of leading players
• Understand regional dynamics and investment hotspots
• Support strategic decision-making with data-driven forecasts
Frequently Asked Questions (FAQs)
1. How big was the global data center cooling market in 2024?
The market was valued at US$ 21.2 billion in 2024.
2. How big will the data center cooling industry be in 2035?
It is projected to reach more than US$ 73.4 billion by 2035.
3. What factors are driving market growth?
Rising demand for data center efficiency, AI and cloud adoption, and focus on energy efficiency and sustainability.
4. What is the expected CAGR during the forecast period?
The market is expected to grow at a CAGR of 11.9% from 2025 to 2035.
5. Who are the prominent players in the market?
Key players include Vertiv Group Corp., Carrier, Daikin, Johnson Controls, Siemens, Schneider Electric, GRC, Dell Inc., Trane Technologies, and others.
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About Transparency Market Research
Transparency Market Research, a global market research company registered at Wilmington, Delaware, United States, provides custom research and consulting services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insights for thousands of decision makers. Our experienced team of Analysts, Researchers, and Consultants use proprietary data sources and various tools & techniques to gather and analyses information.
Our data repository is continuously updated and revised by a team of research experts, so that it always reflects the latest trends and information. With a broad research and analysis capability, Transparency Market Research employs rigorous primary and secondary research techniques in developing distinctive data sets and research material for business reports.
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