Market Overview
Liquid cooling for data centers involves using water or engineered coolants to absorb and dissipate heat from high-density computing equipment. As AI, machine learning, and HPC workloads increase, traditional air cooling methods fall short. Liquid cooling solutions like direct-to-chip and immersion cooling offer significantly greater thermal efficiency, enabling improved performance and lower power usage effectiveness (PUE).
With hyperscale data centers and enterprise facilities demanding more efficient and scalable thermal solutions, liquid cooling technologies are becoming central to modern data center infrastructure.
Market Size
Liquid Cooling for Data Center Market was valued at USD 1,982 million in 2023 and is projected to reach USD 11,101.99 million by 2032, growing at a CAGR of 21.10%. In North America, the market reached USD 720.15 million in 2023, with expected growth fueled by hyperscale data center expansion and energy efficiency initiatives.
Market Drivers
Rising Data Processing Demands Drive Thermal Innovation
AI, big data, and HPC workloads produce heat beyond what conventional cooling systems can manage. Liquid cooling provides up to 1,000x greater heat dissipation efficiency compared to air-based systems. Companies like Intel and Submer are pioneering next-gen immersion cooling systems to support demanding AI infrastructures while aligning with energy and ESG goals.
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Market Restraints
High Upfront Investment and Infrastructure Complexity
Integration of liquid cooling systems often requires retrofitting existing data centers, reconfiguring server racks, and managing safety concerns, which poses a challenge for small and mid-sized facilities. The complexity of transitioning from air cooling leads to hesitation among operators lacking capital or technical resources.
Market Opportunities
Hyperscale Data Centers Fuel Adoption
Cloud leaders like Microsoft, AWS, and Google Cloud are heavily investing in liquid cooling to manage dense AI and cloud workloads efficiently. In May 2025, Microsoft and NVIDIA announced collaboration to integrate liquid cooling with next-gen GPUs, improving thermal performance while maintaining energy efficiency for massive AI models.
Market Challenges
Lack of Standardization Slows Market Scaling
Proprietary designs and lack of interoperability hinder wider adoption. Operators face compatibility issues with connectors, thermal interface materials, and system designs. Vendors like Submer, Vertiv, and LiquidStack offer powerful but varied solutions, making cross-platform integration complex.
A recent Castrol survey suggests that immersion cooling must be widely implemented within three years for operators to keep up with rising computing demands. Otherwise, they risk falling behind in AI-readiness.
Regional Insights
North America leads in adoption, especially in the US where companies like Meta and Equinix are investing in direct-to-chip liquid cooling to support AI infrastructure.
Europe is advancing through sustainable collaborations. In Germany, Equinix plans to supply waste heat from its Frankfurt data centers to 1,000 households by 2025. Similar initiatives are underway in the Netherlands.
Asia-Pacific is rapidly emerging as a growth hub. In Japan, NTT Communications and Mitsubishi Heavy Industries are piloting two-phase direct-to-chip cooling to reduce CO₂ emissions without large-scale facility overhauls.
South America is accelerating digital infrastructure. AWS committed $4 billion to build data centers in Chile, marking its third cloud region in Latin America.
Middle East & Africa are experiencing rising demand driven by internet penetration and national digitalization plans, especially in UAE and Saudi Arabia.
Top 10 Companies in Liquid Cooling for Data Center Market
Vertiv – Offers modular and scalable liquid cooling systems for AI and HPC.
Stulz – Specializes in precision and modular cooling with high customization.
CoolIT Systems – Known for efficient direct-to-chip cooling solutions.
Schneider Electric – Provides EcoStruxure and acquired Motivair in 2024.
Submer – A pioneer in immersion cooling technology for sustainable data centers.
Green Revolution Cooling – Develops high-efficiency immersion systems.
Huawei – Expanding liquid cooling in Asia-Pacific cloud infrastructures.
Sugon – Offers advanced liquid-cooled solutions in HPC environments.
Midas Immersion Cooling – Innovates in server rack-level immersion technology.
Rittal – Delivers hybrid and liquid cooling systems across enterprise deployments.
Recent Strategic Developments
Intel enhanced its Superfluid cooling using microbubble injection for superior heat transfer, designed for Nvidia’s high-power servers.
October 2024: Schneider Electric acquired a majority stake in Motivair for USD 850 million to expand high-performance liquid cooling.
December 2024: Vertiv acquired BiXin Energy (China) to strengthen AI cooling capability.
December 2023: Equinix announced support for direct-to-chip cooling in over 100 IBX® data centers worldwide.
December 2023: Vertiv acquired CoolTera Ltd (UK), expanding liquid cooling innovation across global markets.
Market Segmentation
By Cooling Type
Direct-to-Chip (Cold Plate) Cooling
Immersion Cooling
Other Liquid Cooling Solutions
By Data Center Type
Hyperscale Data Centers
Enterprise Data Centers
Colocation Providers
Modular/Edge Data Centers
Cloud Providers
By End Use Industry
IT & Telecom
BFSI
Healthcare
Government & Defense
Energy & Utilities
Manufacturing
Cloud & Hyperscale Providers
Others
Geographic Segmentation
North America – USA, Canada, Mexico
Europe – Germany, UK, France, Russia, Italy
Asia-Pacific – China, Japan, South Korea, India, Southeast Asia
South America – Brazil, Argentina, Colombia
Middle East and Africa – UAE, Saudi Arabia, South Africa, Nigeria
FAQs
What is the current market size of Liquid Cooling for Data Center?
Valued at USD 1,982 million in 2023, projected to reach USD 11,101.99 million by 2032.
Which are the key companies?
Top players include Vertiv, Schneider Electric, Stulz, Submer, Huawei, CoolIT, and Green Revolution Cooling.
What drives market growth?
Rising demand for energy-efficient cooling, AI/HPC workloads, and sustainability initiatives.
Which regions lead the market?
North America dominates, while Asia-Pacific is expected to grow fastest.
What are the top trends?
Key trends include immersion cooling, AI-integrated thermal monitoring, and sustainable fluid technologies.
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