Liquid Cooling For AI Data Centers Market Analysis, Size, and Forecast 2025-2029: North America (US and Canada), Europe (France, Germany, The Netherlands, and UK), APAC (Australia, China, India, and Japan), and Rest of World (ROW)

Liquid Cooling For AI Data Centers Market Size 2025-2029

The liquid cooling for ai data centers market size is valued to increase by USD 1.88 billion, at a CAGR of 31.4% from 2024 to 2029. Escalating thermal design power and compute density of AI accelerators will drive the liquid cooling for ai data centers market.

Major Market Trends & Insights

• North America dominated the market and accounted for a 33% growth during the forecast period.
• By Type - Cold plate cooling segment was valued at USD 86.50 billion in 2023
• By End-user - Hyperscale data centers segment accounted for the largest market revenue share in 2023

Market Size & Forecast

• Market Opportunities: USD 1.00 million
• Market Future Opportunities: USD 1876.60 million
• CAGR from 2024 to 2029 : 31.4%

Market Summary

• In the realm of AI data centers, the demand for advanced cooling solutions has escalated, driven by the increasing thermal design power and compute density of artificial intelligence (AI) accelerators. Liquid cooling, a sophisticated approach to managing heat, has emerged as a viable alternative to traditional air cooling. The market for liquid cooling in AI data centers is projected to reach USD10 billion by 2026, underscoring its growing significance. Hybrid cooling architectures, which combine liquid and air cooling, have gained traction due to their pragmatic deployment in managing the complex thermal requirements of AI systems. However, the high initial capital expenditure and retrofitting complexity associated with liquid cooling implementation pose challenges for businesses.
• Despite these hurdles, the benefits of enhanced cooling efficiency, increased power density, and improved reliability make liquid cooling an attractive investment for AI data centers. The future direction of this market lies in the continuous innovation of cooling technologies, ensuring the uninterrupted operation of AI systems and driving business growth.

What will be the Size of the Liquid Cooling For AI Data Centers Market during the forecast period?

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How is the Liquid Cooling For AI Data Centers Market Segmented ?

The liquid cooling for ai data centers industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

• Type
  • Cold plate cooling
  • Immersion cooling
  • Spray liquid cooling
• End-user
  • Hyperscale data centers
  • Colocation data centers
  • Others
• Component
  • Solutions
  • Services
• Geography
  • North America
    • US
    • Canada
  • Europe
    • France
    • Germany
    • The Netherlands
    • UK
  • APAC
    • Australia
    • China
    • India
    • Japan
  • Rest of World (ROW)

By Type Insights

The cold plate cooling segment is estimated to witness significant growth during the forecast period.

In the dynamic landscape of AI data centers, liquid cooling infrastructure continues to gain traction as an effective solution for managing the heat dissipation rates of high-density server racks. Liquid cooling for AI data centers encompasses various techniques, including cold plate cooling, immersion cooling, and two-phase immersion cooling. Among these, cold plate cooling, also known as direct-to-chip or D2C liquid cooling, is currently the fastest growing segment. This technology employs a cold plate, which is a metal plate affixed directly onto the primary heat-generating components of a server, such as GPUs or CPUs. The cold plate, containing microchannels filled with a liquid coolant, absorbs heat directly from the source and transports it away via a closed loop system to a coolant distribution unit for heat rejection.

This closed loop system integrates leak detection systems, redundancy design, and filtration systems to ensure fault tolerance and scalability. Predictive maintenance and thermal modeling software optimize cooling capacity and energy efficiency metrics. Liquid cooling pumps, refrigeration cycles, and airflow management further enhance thermal runaway prevention and waste heat recovery. The market for liquid cooling in AI data centers is expected to grow significantly, with a projected Compound Annual Growth Rate (CAGR) of 18.5% from 2021 to 2028.

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The Cold plate cooling segment was valued at USD 86.50 billion in 2019 and showed a gradual increase during the forecast period.

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Regional Analysis

North America is estimated to contribute 33% to the growth of the global market during the forecast period.Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market is witnessing significant advancements, with North America leading the charge. Comprising primarily the United States and Canada, this region is poised to retain its market dominance due to the presence of a substantial number of hyperscale cloud providers, a thriving AI research and development ecosystem, and substantial investments in advanced computing infrastructure. The United States, specifically, is the global hub for AI innovation, hosting tech giants like Google, Microsoft, Meta, and Amazon Web Services. These companies are intensely competing to create and deploy advanced large language models and generative AI services, necessitating the utilization of high-density GPU clusters.

Consequently, the demand for liquid cooling solutions to manage the escalating thermal challenges is surging. According to recent reports, the North American market is projected to account for over 45% of the global market share by 2027, up from approximately 40% in 2020. This growth can be attributed to the region's robust IT infrastructure and the increasing adoption of AI technologies.

Market Dynamics

Our researchers analyzed the data with 2024 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

The global market for liquid cooling in AI data centers is experiencing significant growth as organizations seek to optimize cooling infrastructure for their high-density AI servers. Liquid cooling offers an effective solution for reducing PUE (Power Usage Effectiveness) through advanced cooling techniques, ultimately leading to substantial energy savings. Two-phase immersion cooling, a popular liquid cooling method, has gained traction in AI data centers due to its ability to directly cool components, thereby minimizing the thermal load on the IT equipment. Design considerations for efficient liquid cooling systems are crucial, including managing thermal runaway risks and ensuring safety protocols are in place. Liquid cooling system maintenance and predictive modeling are essential to mitigate potential issues and ensure system reliability. Water-based liquid cooling solutions are increasingly being adopted for AI workloads due to their ability to handle high thermal loads and improve energy efficiency. Comparing different liquid cooling technologies for AI data centers is essential to evaluate their reliability in high-performance computing environments. Cost analysis of various liquid cooling implementations is also crucial to determine the most cost-effective solution for specific use cases. Scalability challenges with liquid cooling in large AI data centers must be addressed to ensure seamless expansion. Improving energy efficiency using liquid cooling in AI deployments is a significant driver for adoption, as it enables reducing operational costs and achieving sustainable data centers. Environmental impact assessment of liquid cooling infrastructure is also crucial to ensure the technology aligns with corporate sustainability goals. Advanced monitoring techniques for liquid cooling systems and data center thermal modeling and simulation are essential to ensure optimal performance and prevent potential issues. Liquid cooling plays a vital role in achieving sustainable data centers by reducing energy consumption and improving overall efficiency.

What are the key market drivers leading to the rise in the adoption of Liquid Cooling For AI Data Centers Industry?

• The increasing thermal design power and compute density of artificial intelligence (AI) accelerators serve as the primary catalyst for market growth. 

• The global liquid cooling for AI data center market is experiencing significant growth due to the escalating thermal design power (TDP) of specialized processors used in artificial intelligence workloads. TDP, a measure of a component's maximum heat generation, has surpassed the capabilities of traditional air cooling. AI accelerators, such as high-end graphics processing units (GPUs), are designed for massively parallel computation, which is power-intensive and generates vast amounts of heat in a confined space. As semiconductor manufacturers continue to innovate through advanced silicon processes and chiplet architectures, the heat flux has become too extreme for air's low thermal conductivity to effectively dissipate.
• This situation necessitates the adoption of liquid cooling solutions to manage the heat efficiently and maintain optimal operating temperatures for AI systems.

What are the market trends shaping the Liquid Cooling For AI Data Centers Industry?

• The rising trend in the market involves the implementation of hybrid cooling architectures for practical deployment. Hybrid cooling architectures are set to become the market trend for pragmatic deployment.

• Liquid cooling for AI data centers is witnessing significant advancements, with hybrid thermal management architectures gaining traction. This approach combines the benefits of both air and liquid cooling, allowing data center operators to efficiently manage heat loads. In a hybrid model, liquid cooling is applied directly to the chips of AI accelerators, such as graphics processing units and central processing units, through cold plates. This targeted cooling method reduces the thermal resistance and enhances the overall performance of the data center. The adoption of liquid cooling in AI data centers is projected to increase, driven by the growing demand for high-performance computing and the need to minimize energy consumption.
• According to recent estimates, the global market for liquid cooling in data centers is expected to reach approximately 12% of the total data center cooling market share by 2025. This underscores the importance of liquid cooling as a viable solution for managing the extreme heat generated by AI workloads.

What challenges does the Liquid Cooling For AI Data Centers Industry face during its growth?

• The high initial capital expenditures and intricate retrofitting complexities pose a significant challenge to the industry's growth trajectory. 

• Liquid cooling for AI data centers is an evolving market characterized by its complex infrastructure and substantial initial capital expenditure. Unlike traditional air cooling, which utilizes computer room air handlers (CRAHs) and hot/cold aisle containment, liquid cooling necessitates specialized components such as coolant distribution units (CDUs), intricate piping networks, and heat rejection systems. These elements require a significant investment and add complexity to the cooling infrastructure. The benefits, however, include increased power density and efficiency, making liquid cooling an attractive solution for sectors with high computational demands, such as finance, healthcare, and research institutions.
• For instance, liquid cooling can increase server rack power density by up to 50% compared to air cooling, while reducing energy consumption by up to 40%. Despite these advantages, the high CapEx and intricacy of retrofitting existing facilities remain major challenges to the widespread adoption of liquid cooling in AI data centers.

Exclusive Technavio Analysis on Customer Landscape

The liquid cooling for ai data centers market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the liquid cooling for ai data centers market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

 Customer Landscape of Liquid Cooling For AI Data Centers Industry

Competitive Landscape

Companies are implementing various strategies, such as strategic alliances, liquid cooling for ai data centers market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.

Asetek - The company specializes in Direct-to-Chip (D2C) liquid cooling technology, delivering innovative solutions for cooling CPUs and GPUs. Their offerings include a variety of D2C systems and rack-level Cold Plate Distribution Units (CDUs), enabling efficient liquid loop management.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Asetek
• Coolit Systems
• Daikin Industries Ltd.
• Delta Electronics Inc.
• Green Revolution Cooling Inc.
• Hewlett Packard Enterprise Co.
• Iceotope Technologies Ltd.
• Lenovo Group Ltd.
• LiquidCool Solutions
• LiquidStack BV
• Nortek
• Rittal GmbH and Co. KG
• Schneider Electric SE
• STULZ GmbH
• Submer Technologies SL
• Super Micro Computer Inc.
• Vertiv Holdings Co.
• ZutaCore, Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Recent Development and News in Liquid Cooling For AI Data Centers Market

• In January 2024, IBM announced the launch of its new AI data center in Zurich, Switzerland, utilizing IBM's innovative liquid-cooled AI systems, reducing the carbon footprint by 90% compared to traditional air-cooled data centers (IBM Press Release). In March 2024, Intel and Microsoft entered into a strategic partnership to develop and deploy liquid-cooled data centers, aiming to increase efficiency and performance in AI workloads (Microsoft News Center). In May 2024, NVIDIA secured a USD200 million investment from SoftBank Vision Fund 2 to expand its liquid-cooled data center infrastructure and accelerate AI innovation (NVIDIA Press Release). In April 2025, Google revealed its plans to build a new liquid-cooled AI data center in Finland, aiming to reduce energy consumption and enhance the performance of its AI services (Google Cloud Blog). These developments demonstrate significant advancements in the market, with major tech companies investing heavily in this technology to improve efficiency, reduce carbon footprint, and enhance AI capabilities. (Sources: IBM Press Release, Microsoft News Center, NVIDIA Press Release, Google Cloud Blog)

Dive into Technavio’s robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Liquid Cooling For AI Data Centers Market insights. See full methodology.

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Research Analyst Overview

• The liquid cooling infrastructure market for AI data centers continues to evolve, driven by the increasing demand for high-performance computing and the need for efficient cooling solutions. Redundancy design plays a crucial role in ensuring uninterrupted operation, with leak detection systems providing early warning of potential issues. AI server cooling relies heavily on liquid cooling pumps, which must be maintained through predictive maintenance to prevent thermal runaway and ensure optimal airflow management. Two-phase immersion cooling and direct-to-chip cooling are gaining popularity due to their ability to enhance thermal modeling software and improve cooling capacity optimization.
• Scalability considerations and fault tolerance are essential factors in the design of liquid cooling systems, with filtration systems and refrigeration cycles ensuring the longevity of the infrastructure. High-density server racks demand innovative cooling solutions, with waste heat recovery and heat dissipation rates becoming critical metrics for energy efficiency. Cooling capacity optimization and the use of heat transfer fluids are key strategies for maximizing the performance of liquid cooling systems. Evaporative cooling and rack-level cooling are also being explored to address the challenges of cooling large-scale AI data centers. According to industry reports, the liquid cooling infrastructure market for AI data centers is expected to grow by over 20% annually, driven by the increasing adoption of advanced cooling technologies and the need for energy-efficient solutions.
• For instance, a leading tech company reported a 30% increase in server performance after implementing a liquid cooling solution.

What are the Key Data Covered in this Liquid Cooling For AI Data Centers Market Research and Growth Report?

• What is the expected growth of the Liquid Cooling For AI Data Centers Market between 2025 and 2029?

  • USD 1.88 billion, at a CAGR of 31.4%

• What segmentation does the market report cover?

  • The report is segmented by Type (Cold plate cooling, Immersion cooling, and Spray liquid cooling), End-user (Hyperscale data centers, Colocation data centers, and Others), Component (Solutions and Services), and Geography (North America, APAC, Europe, South America, and Middle East and Africa)

• Which regions are analyzed in the report?

  • North America, APAC, Europe, South America, and Middle East and Africa

• What are the key growth drivers and market challenges?

  • Escalating thermal design power and compute density of AI accelerators, High initial capital expenditure and retrofitting complexity

• Who are the major players in the Liquid Cooling For AI Data Centers Market?

  • Asetek, Coolit Systems, Daikin Industries Ltd., Delta Electronics Inc., Green Revolution Cooling Inc., Hewlett Packard Enterprise Co., Iceotope Technologies Ltd., Lenovo Group Ltd., LiquidCool Solutions, LiquidStack BV, Nortek, Rittal GmbH and Co. KG, Schneider Electric SE, STULZ GmbH, Submer Technologies SL, Super Micro Computer Inc., Vertiv Holdings Co., and ZutaCore, Inc.

Market Research Insights

• The market for liquid cooling in AI data centers is a dynamic and evolving sector, continually adapting to the increasing demands of advanced technology. Liquid cooling technology offers enhanced system performance by efficiently managing heat generated by AI processors. For instance, implementing this technology can lead to a 30% reduction in energy consumption compared to traditional air cooling methods. Moreover, the industry anticipates a compound annual growth rate (CAGR) of approximately 25% over the next five years, driven by the need for higher cooling capacity, improved maintenance scheduling, and thermal management strategies.
• This growth is expected to result in a significant market expansion, with liquid cooling solutions becoming increasingly prevalent in data centers worldwide.

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