Data Center Liquid Cooling Market Outlook 2032: Key Trends, Size, and Future Growth

Qavudfjrtucc · 2025-07-21T09:58:51Z

According to Kings Research, the global data center liquid cooling market size was valued at USD 3880.5 million in 2024 and is projected to grow from USD 4881.7 million in 2025 to USD 24887.4 million by 2032, exhibiting a CAGR of 26.09% during the forecast period. The global expansion of 5G infrastructure and the shift toward liquid-based cooling for high-density computing is driving the growth of the market.

Liquid Cooling: The Future Backbone of Sustainable Data Centers

Data center liquid cooling refers to the use of liquids such as water, dielectric fluids, or refrigerants to dissipate heat from high-performance computing (HPC) systems and servers. These cooling systems offer greater thermal efficiency and lower power consumption compared to conventional air cooling, making them ideal for next-generation data centers.

With rising energy costs and the global push toward carbon neutrality, hyperscale and enterprise data centers are rapidly transitioning to liquid cooling technologies to meet efficiency, performance, and sustainability goals. Liquid cooling ensures operational stability, reduced downtime, and higher rack density—key components of modern digital infrastructure.

Emerging Trends in the Data Center Liquid Cooling Market

One of the dominant trends in the liquid cooling space is the increased adoption of direct-to-chip (D2C) cooling and immersion cooling solutions in hyperscale environments. These technologies allow coolants to come into direct contact with heat-generating components, offering superior heat removal and space savings.

Single-phase immersion cooling is gaining popularity among blockchain and AI firms due to its low maintenance and high scalability. Meanwhile, two-phase immersion systems, which use boiling dielectric fluids, are being tested for their potential to support future quantum computing infrastructure.

Another emerging trend is the integration of AI-powered cooling management systems, which leverage real-time analytics to monitor fluid temperatures, optimize flow rates, and minimize energy usage. This is transforming liquid cooling into an intelligent, self-regulating system within data centers.

Additionally, modular liquid cooling systems are being adopted by colocation providers and edge data centers due to their flexibility, speed of deployment, and ability to support decentralization strategies.

Demand Drivers Fueling Market Growth

A surge in high-density computing applications, including AI/ML, big data analytics, autonomous systems, and 5G infrastructure, is accelerating the shift toward liquid cooling technologies. Traditional air cooling cannot manage the thermal load of CPUs and GPUs required by such workloads.

Rising electricity costs and the environmental impact of power-hungry data centers are pushing companies to adopt sustainable and efficient solutions. Liquid cooling offers PUE (Power Usage Effectiveness) reductions of up to 1.05, compared to 1.7–2.0 for traditional systems, significantly lowering operating costs and carbon footprints.

The market is also being driven by data center expansion in tropical and high-humidity regions, where air cooling becomes inefficient and costly. Liquid cooling solutions maintain optimal operating temperatures regardless of ambient conditions, offering a compelling ROI in such environments.

Furthermore, government regulations encouraging energy-efficient infrastructure—such as the EU's Green Deal and U.S. federal initiatives—are boosting adoption rates. Liquid cooling is seen as a critical enabler for achieving long-term data center sustainability targets.

Market Dynamics and Competitive Landscape

The competitive landscape of the Data Center Liquid Cooling Market is highly dynamic, with companies engaging in strategic collaborations, product innovation, and sustainability initiatives. Major players are investing in modular and scalable cooling systems, targeting hyperscale and edge data center operators.

Technological advancements in coolant chemistry, loop design, heat exchangers, and corrosion resistance are enabling safer and more efficient deployment. Innovations such as AI-based thermal management platforms and digital twins are redefining operational control over cooling ecosystems.

Sustainability is a major theme, with vendors emphasizing non-toxic, biodegradable coolants and closed-loop systems that minimize water consumption. Certifications from ASHRAE, Green Grid, and Uptime Institute are now essential for vendor credibility.

Additionally, M&A activities are reshaping the market as larger HVAC and IT infrastructure firms acquire niche liquid cooling startups to expand their portfolios and gain proprietary technologies.

Market Segmentation

Kings Research segments the Data Center Liquid Cooling Market based on type, data center size, end user, and region.

By Type:

Direct-to-Chip Liquid Cooling
Immersion Cooling (Single-Phase, Two-Phase)
Rear Door Heat Exchangers (RDHx)
Cold Plate Cooling
Others

Direct-to-chip and immersion cooling lead the market due to their superior efficiency and compact design. Immersion cooling is expected to witness the fastest growth, especially in HPC and crypto mining.

By Data Center Size:

Small & Mid-Sized Data Centers
Large/Hyperscale Data Centers

Hyperscale data centers dominate the market share, driven by demand from cloud providers, while edge data centers are emerging as a high-growth segment due to latency-sensitive applications and 5G deployment.

By End User:

Cloud Service Providers
Colocation Providers
Enterprises
Government & Defense
Academic & Research Institutions

Cloud service providers are the largest consumers, driven by expanding workloads, AI integration, and server density. The research sector is also adopting liquid cooling to support simulations and supercomputing tasks.

Key Players in the Market

The Data Center Liquid Cooling Market features several prominent players competing on performance, innovation, and sustainability. Key companies include:

Schneider Electric SE – Offers EcoStruxure-based liquid cooling solutions for both edge and hyperscale environments.
Vertiv Group Corp. – A leader in precision cooling systems with rear door and immersion solutions.
Submer Technologies – Specializes in immersion cooling systems and modular solutions for high-density computing.
LiquidStack – Provides advanced two-phase immersion cooling, targeting hyperscale AI and crypto mining operations.
Midas Green Technologies – Focuses on sustainable immersion cooling solutions using biodegradable fluids.
Green Revolution Cooling (GRC) – Pioneers in single-phase immersion cooling with customizable enclosures.
Iceotope Technologies Ltd. – Offers precision liquid cooling with sealed chassis for minimal water use and optimal security.
Rittal GmbH & Co. KG – Provides hybrid cooling solutions, integrating liquid-based systems with conventional architectures.

These players are constantly investing in R&D, regulatory compliance, and global expansion to meet increasing demand and maintain their competitive edge.

Recent Developments

The Data Center Liquid Cooling Market has witnessed several transformative developments:

Schneider Electric launched an integrated liquid cooling solution combining direct-to-chip modules and AI control systems under its EcoStruxure IT platform.
LiquidStack announced the development of a zero-water-consumption cooling system, ideal for arid regions and high-density workloads.
Vertiv partnered with NVIDIA to deliver ready-to-deploy immersion-cooled AI computing platforms.
GRC introduced a liquid-cooled edge pod, combining computing and cooling in a compact, ruggedized unit for deployment in harsh environments.
Submer Technologies secured funding to scale its SmartPodX immersion systems and expand in Asia and Latin America.
Iceotope collaborated with Dell Technologies to validate chassis-level liquid cooling for enterprise-grade workloads, significantly improving thermal performance.

Regional Analysis

North America holds the dominant market share due to the presence of major hyperscale data centers, early adoption of liquid cooling technologies, and favorable regulatory frameworks. The U.S. leads the region, driven by strong investments from Google, Meta, AWS, and Microsoft.

Europe is the second-largest market, led by Germany, the Netherlands, and the Nordic countries. The EU's emphasis on energy efficiency and green data centers is accelerating the adoption of liquid cooling solutions. Colocation and cloud service providers are investing heavily in next-gen cooling infrastructure.

Asia-Pacific is expected to witness the fastest growth, propelled by rising data consumption, 5G expansion, and smart city initiatives in China, India, Japan, and South Korea. Liquid cooling adoption is especially prominent in data-dense megacities and AI hubs.

Latin America and Middle East & Africa are emerging markets with significant potential. In LATAM, Brazil and Mexico are leading deployments, while UAE and Saudi Arabia are investing in green data centers aligned with Vision 2030 goals.

Future Outlook

Looking ahead, the Data Center Liquid Cooling Market is on a high-growth trajectory, fueled by the convergence of sustainability goals, performance demands, and technological innovation. Key future enablers include:

AI-powered thermal management
Waste heat recovery for circular energy systems
Integration with smart grids and renewable sources
Microbial or nanofluid coolants for enhanced efficiency
Liquid-cooled chip designs by semiconductor giants

As data center density continues to increase, liquid cooling will transition from a niche to mainstream solution, especially for hyperscale, AI, and edge computing deployments.

Companies that prioritize R&D, environmental responsibility, and flexible product design will lead the next phase of data center innovation. Governments, cloud service providers, and tech startups must collaborate to build resilient, scalable, and sustainable digital infrastructure.

To access the full Kings Research PDF report on the Data Center Liquid Cooling Market, visit:
https://www.kingsresearch.com/data-center-liquid-cooling-market-2331