Data Center Cooling Market to Grow at a CAGR of 16.21% from 2025 to 2032 | SkyQuest Technology Consulting

The Data Center Cooling Market is anticipated to expand at a rapid pace due to the increasing demand for efficient cooling solutions driven by the proliferation of data-intensive applications such as artificial intelligence (AI), cloud computing, and the Internet of Things (IoT).

WESTFORD, Mass., Aug. 4, 2025 /PRNewswire/ -- SkyQuest Technology Consulting published a report, titled, Data Center Cooling Market - Global Opportunity Analysis and Industry Forecast, 2025-2032", valued at USD 19.57 Billion in 2024. With a projected CAGR of 16.21% from 2025 to 2032, the market is expected to reach USD 64.38 Billion by the end of 2032. The growing emphasis on sustainability and energy efficiency is prompting data center operators to adopt innovative cooling methods that reduce energy consumption and minimize environmental impact.

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Data Center Cooling Market Dynamics:

The data center cooling market is driven by the rapid growth of data generation and storage needs fueled by emerging technologies like AI, cloud computing, and IoT, which increase the demand for efficient thermal management solutions. Additionally, rising energy costs and stringent environmental regulations are pushing data center operators to adopt energy-efficient and sustainable cooling technologies.

A key trend in the market is the adoption of liquid cooling and immersion cooling technologies, which offer higher cooling efficiency compared to traditional air cooling. Another important trend is the integration of AI and IoT-enabled smart cooling systems that allow real-time monitoring and adaptive control to optimize cooling performance while reducing operational costs. These drivers and trends collectively contribute to the accelerating expansion and innovation within the data center cooling market.

Recent Developments in Data Center Cooling Market

• In October 2024, Schneider Electric announced the acquisition of a controlling interest in Motivair Corporation, a company specializing in liquid cooling and advanced thermal management solutions for high-performance computing systems. This strategic move enhances Schneider Electric's capabilities in providing sustainable and efficient cooling solutions tailored for modern data centers.
• In October 2024, Vertiv introduced two new high-capacity Coolant Distribution Units (CDUs) to its liquid cooling portfolio. These units are designed to support AI applications and high-density compute environments, addressing the growing demand for efficient cooling solutions in data centers.
• In October 2024, Vertiv and Compass Datacenters announced a collaboration to develop a combined liquid and air-cooling system. This first-of-its-kind solution aims to meet the evolving cooling needs of data centers supporting AI applications, integrating both cooling technologies to enhance efficiency and performance.

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Major Challenges in Data Center Cooling Industry

The data center cooling market faces several challenges that could hinder its growth. High initial capital investment and maintenance costs for advanced cooling technologies such as liquid cooling and immersion cooling can be a barrier for many data center operators. Additionally, the complexity of integrating new cooling solutions with existing infrastructure poses technical and operational challenges.

Energy consumption remains a concern despite efficiency improvements, especially as data centers continue to scale in size and capacity. Furthermore, managing the environmental impact of refrigerants used in cooling systems, along with regulatory compliance, adds to the market's challenges.

Competitive Landscape:

The data center cooling market is highly competitive, with key players continuously innovating to meet the growing demand for efficient and sustainable cooling solutions. Leading companies such as Schneider Electric, Vertiv Holdings, Asetek, Stulz, and Delta Electronics dominate the market by offering advanced products and services. In May 2025, Samsung Electronics announced its acquisition of FlaktGroup, a German manufacturer specializing in air conditioning and heating systems, for €1.5 billion ($1.68 billion).

The major players in the data center cooling industry include,

• Vertiv Holdings
• Schneider Electric
• Asetek
• Delta Electronics
• Rittal
• STULZ
• CoolIT Systems
• Huawei Technologies
• Johnson Controls
• Hanley Energy
• GridFree AI
• Hewlett Packard Enterprise (HPE)

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Data Center Cooling Market Segmentation:

Global data center cooling market is segmented into component, data center type, type of cooling, end-use industry and region. Based on component, the market is segmented into solution and services. Based on data center type, the market is segmented into mid-sized data centers, enterprise data centers and large data centers. Based on type of cooling, the market is segmented into room-based cooling and row/rack-based cooling. Based on end-use industry, the market is segmented into BFSI, IT & telecom, research & academic, government & defense, retail, energy, manufacturing, healthcare and other end-use industries.

• By component, solutions dominate because they provide critical hardware and software for effective thermal management and equipment protection.
• By data center type, large data centers dominate due to their extensive server setups and higher cooling requirements.
• By type of cooling, row/rack-based cooling dominates as it delivers efficient, localized cooling directly at heat sources.
• By end-use industry, IT & telecom dominate owing to rapid digital growth and the need for reliable data center operations.

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Regional Insights

North America dominates the data center cooling market due to the presence of major data center hubs in the U.S. and Canada, driven by rapid growth in cloud computing, AI, and big data analytics. The region benefits from advanced infrastructure, high adoption of innovative cooling technologies, and stringent environmental regulations pushing for energy-efficient solutions.

The Asia Pacific region is witnessing the fastest growth, fueled by expanding digital economies in countries like China, India, Japan, and South Korea. Increasing investments in hyperscale data centers, growing internet penetration, and government initiatives to support digital infrastructure are driving demand for efficient cooling systems tailored to hot and humid climates.

Growth in Europe's market is supported by the expansion of data centers in countries such as Germany, the United Kingdom and France, in collaboration with strict environmental policy that promotes green refrigeration technologies.

The LAMEA is an emerging region for cooling, driven by increasing digitization, adopting cloud services and increasing telecommunications infrastructure in countries such as Brazil, South Africa and UAE. Despite the challenges of the infrastructure, the growing awareness of permanent cooling solutions for the development of data and state support is promoting the growth in the market.

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