Water and Power Limits Are Reshaping How Data Centers Choose Cooling-Arizton

Operators can lower cooling water use and energy together, but only by combining liquid cooling, free cooling, smarter controls and heat reuse.
Water scarcity and rising electricity demand are now the two biggest brakes on data center cooling investment, according to Arizton Advisory & Intelligence's new report on the global data center cooling market. The market was valued at USD 26.96 billion in 2025 and is expected to reach USD 63.03 billion by 2031, growing at a CAGR of 15.20%, as operators look for cooling that uses less of both.

How Can Data Centers Cut Cooling Water Use Without Raising Energy Costs?
The two goals pull against each other. Evaporative and water-based cooling use large volumes of water, and large hyperscale and colocation facilities consume millions of litres a year, which is drawing pressure from governments, communities and environmental groups in drought-hit regions. Advanced systems such as liquid cooling, precision cooling and intelligent thermal management support higher rack densities, but they can raise electricity use, and limited grid capacity can delay deployment.

Operators are closing the gap in four ways:
• Liquid and direct-to-chip cooling to lift efficiency at high density. Northern Data's 20 MW Pittsburgh facility, launched in June 2025, uses direct-to-chip cooling and was designed for a Power Usage Effectiveness (PUE) of around 1.15.
• Free cooling and seawater cooling where the climate allows, as seen in the Nordics and at coastal sites.
• Intelligent cooling controls, digital twins and predictive maintenance to cut energy waste.
• Waste heat reuse. In May 2026, Telehouse installed direct-to-chip cooling at its Toronto data center and will pass the captured heat to Enwave's district heating network.
" Water and power are now design inputs, not afterthoughts. Operators that target a PUE below 1.4 and plan water-efficient cooling from the start will secure approvals and capacity faster than those that retrofit later."

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Key Findings
• Operators are targeting PUE below 1.4 to cut operating costs and meet sustainability targets.
• Water-based cooling dominated the liquid-based segment in 2025, and seawater is emerging as a cooling source for coastal data centers.
• Liquid-based cooling is projected to grow at 18.94% CAGR through 2031.
• Cooling infrastructure investment rose by around 63.89% in 2025, with North America contributing around 60%.
• Western Europe is prioritizing indirect evaporative cooling, chilled-water cooling and heat recovery, while Middle Eastern operators are investing in water-efficient designs built for high temperatures.

Know More: https://www.arizton.com/market-reports/data-center-cooling-market-report

What This Means for Buyers and Suppliers
Operators should compare cooling options on water use, power draw and PUE together, not one at a time. Suppliers of closed-loop, dry-cooler, free cooling and heat-recovery systems should target water-stressed and regulated markets first.

About the Report
Global Data Center Cooling Market Landscape 2026-2031 is a 526-page third edition covering 6 segments, 110 companies, 9 regions and 43 countries, with 15-20% free customization on every license tier. A free sample is available at arizton.com, and the full report is at arizton.com/market-reports/data-center-cooling-market-report.

About Arizton Advisory & Intelligence
Arizton Advisory & Intelligence is a market research and advisory firm. Around 80% of its reports are exclusive and first to market, and 200+ Fortune 500 companies rely on its research.

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Source: Arizton Advisory & Intelligence

This release was published on openPR.