Data Center Cooling Market to Reach US$ 42 Bn by 2031, Growing at 16.5% CAGR as AI Racks Push Cooling From Air to Liquid: Wissen Research
SHERIDAN, Wyo., Nov. 11, 2026 /PRNewswire/ -- How big is the data center cooling market, and what is driving its growth?
The global data center cooling market is valued at USD 19.5 billion in 2026 and is projected to reach USD 42 billion by 2031, growing at a CAGR of 16.5% over the forecast period (2026-2031), according to a new study by Wissen Research.
The number that explains the growth is rack density. The U.S. Department of Energy's COOLERCHIPS 1.5 programme, announced on 26 August 2026, targets cooling systems capable of managing thermal loads of up to 1 MW per rack, a figure that shows how far AI infrastructure has pushed heat management. The report finds the market moving from conventional air-based cooling toward more efficient and advanced thermal management architectures, including liquid cooling, hybrid air-and-liquid designs, row- and rack-based configurations, and AI-assisted optimization.
Air is not going away yet. The Uptime Institute's 2025 Cooling Systems Survey found that 75% of surveyed operators used perimeter air cooling, and the ICEF Sustainable Data Centers Roadmap reported that 95% of nearly 1,000 surveyed owners and operators relied predominantly on air-cooled systems in 2024. That contrast between an installed base built on air and new workloads that need more than air is what frames the market.
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Air Still Leads Today, While Liquid Cooling Takes On the Hardest Loads
Air-based cooling held the leading position by cooling technology in 2025 because of its established installed infrastructure, lower implementation complexity, operational familiarity, and compatibility with existing data center architectures, particularly in conventional enterprise and colocation facilities. Uptime's survey also found that air-cooled chillers were the most commonly used external heat-rejection system, at 35% of responses from 400 operators, and that direct expansion systems and air conditioners accounted for 22% of reported primary heat-rejection systems.
Liquid approaches are gaining attention for the densest environments. Direct-to-chip cooling, immersion cooling, adiabatic cooling, and closed-loop systems give operators alternative ways to manage higher thermal loads and reduce water consumption. Suppliers are building out the hardware: Schneider Electric unveiled its Motivair liquid cooling portfolio in September 2025, covering coolant distribution units (CDUs), rear-door heat exchangers, dynamic cold plates, liquid-to-air heat dissipation units, chillers, and technology cooling system loops. Vertiv's CoolLoop rear-door heat exchanger offers cooling capacities of up to 80 kW per rack, Boyd's ROL2300 CDU offers 2.3 MW and supports more than 10 NVIDIA NVL72 racks per unit, Johnson Controls' Silent-Aire CDU portfolio scales from 500 kW to more than 10 MW, and Carrier's CDUs range from 1.3 MW to 5 MW for hyperscale and colocation facilities.
Water and Energy Rules Are Becoming Design Inputs
Cooling decisions are no longer only about removing heat. The European Commission's Delegated Regulation (EU) 2024/1364 established a common framework for data center sustainability ratings and reporting, with reporting deadlines including 15 May 2025, and in early 2026 the Commission started a 24-month study on minimum performance standards for data centers that could influence cooling equipment selection and design. China's National Development and Reform Commission and associated agencies issued a green and low-carbon development action plan for data centers in July 2024 that includes energy-saving upgrades and improved cooling efficiency. India's government has highlighted direct-to-chip, immersion, adiabatic, and closed-loop liquid cooling as ways to reduce data center water consumption, and its District Cooling Guidelines 2023 recommend treated water for cooling-tower make-up and alternative water sources wherever feasible.
The report's reading is that technology adoption must address both thermal performance and resource efficiency. Operators have to weigh energy efficiency, water requirements, climate conditions, and infrastructure constraints when selecting cooling architectures, while sustainability reporting increases the importance of showing improved resource use alongside reliable temperature control.
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What's Fueling Growth in the Data Center Cooling Market
- Rising data center capacity: Expanding facilities need additional cooling equipment. India's installed data center capacity grew from approximately 375 MW in 2020 to around 1,500 MW by 2025.
- AI and high-performance computing workloads: Higher rack power densities and heat loads are encouraging operators to adopt cooling solutions capable of handling them.
- Energy efficiency: Operators are investing in cooling technologies that reduce power consumption and improve performance, supported by government energy-efficiency initiatives.
- Regulatory and sustainability requirements: Rules on energy performance, water consumption, and environmental reporting encourage more efficient and sustainable cooling infrastructure.
- Advances in liquid cooling: Direct-to-chip, immersion, and closed-loop systems are expanding the options for managing high-density computing environments.
- Hyperscale and colocation investment: Growing investment in these facilities increases demand for scalable cooling equipment and services.
Challenges Facing the Data Center Cooling Market
Cost and retrofitting are the first hurdles. Liquid cooling involves specialized equipment and facility integration, and upgrading existing data centers can require modifications to accommodate different cooling configurations, which complicates installation for both providers and operators. Maintenance complexity and the need to integrate new equipment with existing cooling infrastructure can raise operating requirements further.
Resources are the second. Water availability and energy consumption influence technology selection, particularly in locations facing water constraints, and regulatory compliance and sustainability reporting add operational responsibilities. The report notes that actual technology adoption depends on facility requirements, infrastructure compatibility, installation costs, operating conditions, and resource availability, and that balancing thermal performance, reliability, resource consumption, and operating costs remains an important challenge for operators.
Recent Strategic Developments in the Data Center Cooling Market
In November 2026, Vertiv unveiled a global ecosystem offering that pairs an expanded collaboration with Dow with a new partnership with Solenis, so operators can run liquid cooling as one integrated thermal system. The offering links Vertiv's infrastructure, monitoring, and service network with coolant chemistry and water-treatment expertise, helping customers keep fluids in good condition and tune performance across the system's life.
In November 2026, Mitsubishi Electric Corporation of Japan, through Mitsubishi Electric Trane HVAC US, rolled out the next generation of its s-MEXT precision cooling solution for data centers, server rooms, telecom facilities, and other high-sensible-load applications. Designed to work with P-Series outdoor units, the update refreshes its precision cooling range for smaller, high-heat-load IT spaces.
In October 2026, Daikin Industries, Ltd. of Japan introduced a new line of coolant distribution units for AI data centers, with single units reaching 2.5 MW, and showed them at an industry congress in Cannes. The range starts at 400 kW, up to ten units can run together under one control system, and preassembled multi-unit skids are offered for larger sites.
In October 2026, Carrier Global Corporation of the United States announced plans to invest more than $600 million over three years in a new advanced manufacturing and engineering center in Fort Worth, Texas, with operations expected from 2027. The facility will exceed one million square feet and add commercial chiller production capacity, backed by record backlog in data centers and other sectors.
The four announcements cover liquid cooling chemistry and service, precision cooling for smaller high-heat spaces, coolant distribution units, and chiller manufacturing capacity.
Key Insights from Data Center Cooling Market Analysis
- Hardware held a leading position by solution in 2025 because cooling infrastructure requires substantial physical equipment, including chillers, cooling towers, air-handling units, heat exchangers, pumps, and liquid cooling components, while services mainly support installation, maintenance, and optimization of those systems.
- Air-based cooling held the leading position by cooling technology in 2025, supported by its installed base and compatibility with existing architectures, as outlined above.
- North America held a leading position by region in 2025, owing to its mature data center ecosystem, extensive hyperscale infrastructure, concentration of major cloud service providers, substantial AI investment, and early adoption of advanced cooling technologies.
- Asia-Pacific is the fastest-growing region, supported by rapid expansion of hyperscale and colocation facilities and a shift toward larger, AI-ready data centers.
- The market is moderately fragmented, with established data center infrastructure providers, industrial HVAC manufacturers, and specialized thermal management companies competing across air-based and liquid-based solutions. Leaders benefit from customer relationships, broad cooling portfolios, engineering expertise, global manufacturing capabilities, and extensive service networks.
- Diversified suppliers and specialists coexist. Vertiv, Schneider Electric, Johnson Controls, Daikin, Trane Technologies, and Carrier represent diversified infrastructure and cooling suppliers, while CoolIT Systems, Asetek, Submer Technologies, and Iceotope Technologies focus on specialized cooling solutions.
Key Players in the Data Center Cooling Market
Leading companies in the data center cooling market are focusing on advanced cooling system innovation, energy efficiency, liquid cooling capabilities, manufacturing expansion, integrated product portfolios, and improved thermal management solutions to address evolving requirements across hyperscale, enterprise, and colocation data centers.
The report names Vertiv Group Corp. (US), Johnson Controls International plc (Ireland), Schneider Electric SE (France), Daikin Industries, Ltd. (Japan), and Trane Technologies plc (Ireland) as the top five players. Other companies profiled in the report include Carrier Global Corporation (US), STULZ GmbH (Germany), Rittal GmbH & Co. KG (Germany), Mitsubishi Electric Corporation (Japan), and Asetek A/S (Denmark).
The report also covers Alfa Laval, CoolIT Systems, Nortek Air Solutions, Delta Electronics, Munters Group, Green Revolution Cooling, Submer Technologies, Fujitsu, Hitachi, Modine Manufacturing, Iceotope Technologies, Danfoss, Kelvion, Huawei Technologies, and Blue Star Limited, among others.
Regional Analysis and Growth Opportunities
North America leads the data center cooling market. CBRE reported that primary North American data center markets reached 9,432 MW of total capacity by the end of 2025, up 36% year on year. Users absorbed 2,497.6 MW across North America's eight primary markets during 2025, a 38% increase from 1,809.5 MW in 2024, and primary-market vacancy fell to a record-low 1.4%. JLL put the region's construction pipeline at approximately 35 GW in its year-end 2025 assessment, with 64% of planned construction capacity outside traditional established markets.
Asia-Pacific is the fastest-growing region, supported by the rapid expansion of hyperscale and colocation facilities across China, India, Japan, Malaysia, Indonesia, and Australia. According to CBRE, Asia-Pacific data center investment reached a record USD 11.6 billion in 2025, and the regional development pipeline reached 26.5 GW in the first half of 2026, with approximately 50% of under-construction capacity concentrated in Southeast Asia. That is creating opportunities for advanced chillers, precision cooling systems, direct-to-chip liquid cooling, and other energy-efficient thermal management technologies. In India, Schneider Electric launched its first Indian Motivair liquid cooling manufacturing facility in Bengaluru on 18 February 2026, making India its third global production location for the technology.
In Europe, sustainability reporting rules and the Commission's ongoing study of minimum performance standards are shaping equipment selection and infrastructure investment. Latin America and the Middle East & Africa complete the report's regional coverage.
Market Segmentation Snapshot
The global data center cooling market is segmented across solution, component, type of cooling, data center type, end-use industry, and region:
- By Solution:
- Hardware
- Services
- By Component:
- Air Conditioning
- Chilling Units
- Cooling Towers
- Liquid Cooling Systems
- Economizer Systems
- Control Systems
- Other Components
- By Type of Cooling:
- Room-Based Cooling
- Row/Rack-Based Cooling
- By Data Center Type:
- Hyperscale Data Centers
- Enterprise Data Centers
- Colocation Data Centers
- By End-Use Industry:
- BFSI
- IT & Telecom
- Research & Academic
- Government & Defense
- Retail
- Energy
- Manufacturing
- Healthcare
- Other End-Use Industries
- By Region:
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa
Frequently Asked Questions
Q: What is the size of the data center cooling market?A: The global data center cooling market is estimated at USD 19.5 billion in 2026 and is projected to reach USD 42 billion by 2031.
Q: What is the growth rate of the data center cooling market?A: The data center cooling market is projected to grow at a CAGR of 16.5% between 2026 and 2031.
Q: What does the data center cooling market include?A: The data center cooling market covers the equipment, systems, and services used to regulate temperatures, remove heat, and maintain suitable operating conditions within data center facilities. It includes hardware and services for air conditioning, chilling units, cooling towers, liquid cooling systems, economizer systems, control systems, and other components, deployed in room-based and row/rack-based configurations across hyperscale, enterprise, and colocation data centers. General data center infrastructure, IT hardware, and power distribution equipment are excluded.
Q: Why is liquid cooling gaining attention in data centers?A: Rising AI and high-performance computing workloads are increasing rack power densities and heat loads. The U.S. Department of Energy's COOLERCHIPS 1.5 programme targets cooling systems capable of managing up to 1 MW per rack, and direct-to-chip, immersion, adiabatic, and closed-loop liquid cooling give operators alternative ways to manage high thermal loads and reduce water consumption.
Q: Which cooling technology leads the data center cooling market?A: Air-based cooling held the leading position by cooling technology in 2025, supported by its installed infrastructure, lower implementation complexity, and compatibility with existing data center architectures. The Uptime Institute's 2025 Cooling Systems Survey found that 75% of surveyed operators used perimeter air cooling.
Q: Which solution type leads the data center cooling market?A: Hardware held a leading position by solution in 2025, because cooling infrastructure requires substantial physical equipment such as chillers, cooling towers, air-handling units, heat exchangers, pumps, and liquid cooling components.
Q: Which region leads the data center cooling market?A: North America held a leading position by region in 2025, while Asia-Pacific is the fastest-growing region through 2031.
Q: Who are the top players in the data center cooling market?A: Leading companies in the data center cooling market include Vertiv Group Corp., Johnson Controls International plc, Schneider Electric SE, Daikin Industries, Ltd., and Trane Technologies plc.
Q: What are the main challenges in data center cooling?A: The main challenges are high installation costs, retrofitting and infrastructure compatibility in existing facilities, water availability and energy consumption, maintenance complexity, and sustainability reporting requirements.
The report describes a market where an air-cooled installed base and a liquid-cooled future are arriving at different speeds in different facilities. For suppliers, the work ahead is integrating air and liquid architectures, helping operators retrofit existing sites, and proving energy and water performance as reporting rules tighten.
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Expert Profile | Mayur Jain, Wissen Research
Mayur Jain is a Research Expert at Wissen Research with multidomain expertise with more than 12+ years of experience in market research industry.
Email: mayur@wissenresearch.com
LinkedIn:https://www.linkedin.com/in/mayur-jain-0190542a/
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