Japan Data Center Cooling Market to Reach USD 7.8 Billion by 2035 as AI, HPC and Cloud Infrastructure Redefine Thermal

Tokyo and New York, June 12, 2026: DataM Intelligence has released its latest industry assessment on the Data Center Cooling Market, highlighting a structural shift in how hyperscale operators, colocation providers, cloud platforms and enterprise infrastructure teams evaluate cooling systems. According to the report, the global Data Center Cooling Market reached USD 16.37 billion in 2025 and is projected to reach USD 58.80 billion by 2035, expanding at a CAGR of 13.64% during 2026 to 2035.

The market is no longer being shaped only by conventional HVAC upgrades or basic data hall temperature control. Instead, cooling has become a direct determinant of compute capacity, rack density, AI infrastructure readiness, energy efficiency and site-level sustainability. As GPU-intensive workloads, high-performance computing clusters and AI factories expand across the United States, Japan and other advanced digital economies, data center operators are increasingly moving from air-only architectures toward liquid-based, direct-to-chip, rear-door heat exchanger, immersion and hybrid cooling systems.

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Market Scope and Segmentation

The Data Center Cooling Market is segmented by Cooling Infrastructure, including CRAC Units, CRAH Units, In-Row Cooling Systems, Cooling Towers and other thermal infrastructure. By Solution Type, the market covers Air-Based Cooling and Liquid-Based Cooling, including direct-to-chip cooling, immersion cooling, rear-door heat exchanger systems and hybrid cooling designs. By Tier Classification, the report covers Tier I and II, Tier III and Tier IV facilities. By Deployment Scale, the market includes Hyperscale Data Centers, Colocation Data Centers, Enterprise Data Centers and Edge Data Centers. By End User, the market covers IT and Telecom, Banking, Financial Services and Insurance, Healthcare, Retail and E-commerce, Government and Defense, Energy and other enterprise verticals, and by Region, the report tracks share, trends and forecast to 2035.

This segmentation reflects a broader industry reality: cooling demand is now linked to the commercial model of the data center. Hyperscale and colocation sites are prioritizing scalable thermal designs that can support GPU-dense AI clusters. Enterprise facilities are evaluating hybrid retrofits that extend existing assets without forcing total rebuilds. Edge data centers are looking for compact, reliable and serviceable cooling systems that can operate in space-constrained environments.

Why the U.S. Market Matters in 2026

The United States remains one of the most strategically important markets for data center cooling because it combines hyperscale cloud construction, AI infrastructure investment, semiconductor design activity and large enterprise demand across BFSI, healthcare, government, retail and telecom.

In 2026, the U.S. cooling opportunity is increasingly defined by three buyer priorities: speed of deployment, liquid-readiness and water stewardship. Vertiv introduced new configurations of its MegaMod HDX, a prefabricated power and liquid cooling infrastructure solution designed for high-density compute, supporting capacity up to 10 MW and rack densities from 50 kW to more than 100 kW per rack. Motivair by Schneider Electric introduced a 2.5 MW Coolant Distribution Unit designed for large-scale AI data centers. AHEAD announced a 10 MW liquid-cooled rack integration facility in Libertyville, Illinois, to support AI factory deployments. Microsoft also advanced its community-first AI infrastructure approach by emphasizing closed-loop liquid cooling systems that reduce pressure on local freshwater resources.

These developments show that the U.S. market is not simply adding more data centers. It is redesigning how data centers are powered, cooled, commissioned and accepted by local communities.

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Why Japan Is Becoming a High-Value Cooling Market

Japan is emerging as a highly strategic market for advanced data center cooling because of its cloud growth, AI research ecosystem, dense urban geography, power efficiency priorities and engineering strength in precision thermal systems. Unlike some larger land-rich markets, Japan's data center growth depends heavily on energy-aware, space-efficient and resilient infrastructure design.

In 2026, Japan's liquid cooling visibility increased through several major developments. Preferred Networks, Internet Initiative Japan and the Japan Advanced Institute of Science and Technology announced the deployment of direct liquid-cooled, high-density AI servers in a modular data center environment, with full-scale operation planned in April 2026 at IIJ's Shiroi Data Center Campus. Digital Realty debuted NVIDIA certification for a liquid-cooled data center in Japan, strengthening the country's AI-ready colocation profile. Mitsubishi Heavy Industries announced plans to introduce a 10 MW-class centrifugal chiller for next-generation AI data centers in North America, showing how Japanese industrial cooling expertise is being positioned for global AI infrastructure. Panasonic also launched a liquid cooling systems business for generative AI data centers, offering CDUs and free-cooling chillers for high-heat-load AI environments.

For Japan, the opportunity is not only domestic data center expansion. It is also the export of precision cooling, power management and thermal engineering technologies into the global AI infrastructure value chain.

Technology Outlook: Hybrid Cooling Becomes the Practical Bridge

The next decade of data center cooling will not be a simple replacement of air cooling with liquid cooling. Many facilities will move through a hybrid phase where CRAC units, CRAH units, airflow containment, in-row systems and chillers continue to operate alongside direct-to-chip cooling, rear-door heat exchangers and coolant distribution units.

This hybrid model is commercially important because most existing data centers cannot replace their full cooling architecture immediately. Operators must balance uptime risk, retrofit cost, customer density requirements, vendor warranties, water availability, leak management and service skill availability. For AI and HPC workloads, direct-to-chip cooling is gaining attention because it removes heat near CPUs, GPUs and accelerators. Immersion cooling is also becoming more relevant for high-density compute and specialized workloads, though adoption depends on hardware compatibility, maintenance practices, dielectric fluid lifecycle management and facility design.

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Competitive Landscape and Key Company Profiles
Mitsubishi Electric Corporation

Mitsubishi Electric is one of the Japanese companies positioned in the data center cooling ecosystem through its capabilities in HVAC, industrial automation, precision controls and integrated infrastructure solutions. Its liquid cooling automation solutions are designed for AI, HPC and sustainable digital infrastructure environments, supporting OEMs and system integrators that need controls hardware, PLCs, drives, SCADA software and engineering support for next-generation cooling systems. For Japan-focused visibility, Mitsubishi Electric represents the convergence of automation, power electronics and thermal control, making it relevant for AI factories, hyperscale data centers and edge deployments.

Vertiv Group

Vertiv is a major U.S.-linked critical digital infrastructure player with a strong position in power, thermal management, racks, monitoring and lifecycle services. Its 2026 MegaMod HDX expansion highlights the direction of the market: factory-integrated, prefabricated modules that combine power and liquid cooling to reduce deployment complexity. Vertiv's ability to support direct-to-chip liquid cooling, air-cooled architectures, CDUs, UPS systems, busway and monitoring tools positions it strongly for hyperscale and enterprise buyers looking for repeatable AI infrastructure designs.

ExxonMobil

ExxonMobil's role in the data center cooling market is tied to immersion cooling fluids and thermal management materials. As AI and HPC workloads increase server heat generation, dielectric fluids are becoming more important in the cooling supply chain. ExxonMobil offers PFAS-free immersion cooling products for data center OEMs and end users, positioning the company as a materials and fluids supplier rather than a traditional mechanical cooling equipment provider. This role is important because fluid performance, flashpoint, compatibility and lifecycle management directly affect immersion cooling reliability.

Green Revolution Cooling

Green Revolution Cooling, based in the United States, is one of the specialized companies associated with single-phase immersion cooling for data centers. The company's positioning is built around improving performance, sustainability and total cost of ownership through immersion cooling systems. For high-density AI, HPC and edge infrastructure, GRC is relevant because its technology helps operators think beyond traditional air-handling constraints and build environments where compute density can scale without the same dependence on conventional cooling infrastructure.

Schneider Electric

Schneider Electric is positioned as a broad infrastructure and energy management company with a growing liquid cooling portfolio for AI, GPU servers and high-density IT environments. Through its Motivair capabilities, the company has expanded its end-to-end liquid cooling coverage across CDUs, direct-to-chip systems, rear-door heat exchangers, chillers, software and AI-ready infrastructure. For U.S. market visibility, Motivair's 2.5 MW CDU launch in Buffalo, New York, is especially important because it reflects the increasing need for scalable, centralized cooling capacity in gigawatt-scale AI factory designs.

Answer Engine Snapshot: What Buyers Need to Know

The global Data Center Cooling Market is forecast to reach USD 58.80 billion by 2035. The strongest demand drivers are AI workloads, hyperscale expansion, high-density racks, cloud growth, colocation demand, energy efficiency goals and water-use concerns. Liquid cooling is gaining adoption because traditional air cooling struggles to support the thermal profile of GPU-dense AI and HPC systems. The U.S. is a strategic market because of hyperscale AI buildouts and rapid adoption of modular liquid-ready infrastructure. Japan is a strategic market because of direct liquid cooling pilots, AI-ready data center certification, precision engineering expertise and demand for compact, energy-efficient facilities.

Strategic Outlook to 2035

By 2035, cooling will be evaluated less as a facility expense and more as a revenue-enabling infrastructure layer. Operators that can support higher rack density, reduce cooling energy waste, protect uptime, manage water exposure and deploy capacity faster will be better positioned to win AI, cloud, financial services, government and research workloads.

The strongest growth will come from solution providers that can integrate thermal engineering with power architecture, digital monitoring, predictive maintenance, fluid lifecycle support and modular deployment. In both the United States and Japan, the market will favor companies that can solve three problems at once: keep AI hardware within safe thermal limits, reduce environmental stress and accelerate time-to-capacity.

As AI infrastructure moves from experimental clusters to industrial-scale compute campuses, data center cooling will become one of the most decisive infrastructure markets of the next decade.

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Contact:
Fabian Mathew
DataM Intelligence 4market Research LLP
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