Data Center Cooling Market Set to Reach $42 Billion by 2031
The global data center cooling market is projected to grow from USD 19.5 billion in 2026 to USD 42 billion by 2031, as AI workloads push operators toward liquid and hybrid cooling systems. Wissen Research forecasts a 16.5% CAGR over the 2026, 2031 period.
- Wissen Research projects the market will reach USD 42 billion by 2031.
- The market is forecast to grow at a 16.5% CAGR from 2026 to 2031.
- Air cooling remains widely used, while liquid cooling targets the densest AI workloads.
- Cooling decisions increasingly depend on energy, water and sustainability requirements.
- Retrofitting costs and integration complexity could slow liquid-cooling adoption.
AI workloads are raising the pressure on cooling systems
According to Wissen Research, rack density is the central factor behind the market's expansion. The U.S. Department of Energy's COOLERCHIPS 1.5 programme, announced on 26 August 2026, targets cooling systems capable of handling thermal loads of up to 1 MW per rack.
The report describes a shift from conventional air-based systems toward liquid cooling, hybrid air-and-liquid designs, row- and rack-based configurations, and AI-assisted optimization. Direct-to-chip, immersion, adiabatic, and closed-loop systems are among the approaches being used to manage higher thermal loads and reduce water consumption.
Air cooling remains the dominant installed technology
Liquid cooling is gaining attention for the densest computing environments, but air cooling still leads the market. Air-based cooling held the leading position by technology in 2025, supported by established infrastructure, lower implementation complexity, operational familiarity, and compatibility with conventional enterprise and colocation facilities.
The Uptime Institute's 2025 Cooling Systems Survey found that 75% of surveyed operators used perimeter air cooling. 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.
Uptime also found that air-cooled chillers were the most common external heat-rejection system, accounting for 35% of responses from 400 operators. Direct expansion systems and air conditioners represented 22% of reported primary heat-rejection systems.
At the same time, suppliers are expanding liquid-cooling hardware. The report cites Vertiv's CoolLoop rear-door heat exchanger, with cooling capacities of up to 80 kW per rack, and Boyd's ROL2300 coolant distribution unit, which 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, while Carrier's CDUs range from 1.3 MW to 5 MW.
Energy, water and retrofit costs will shape adoption
Cooling choices are increasingly tied to energy use, water availability and environmental reporting. Wissen Research points to the European Commission's Delegated Regulation (EU) 2024/1364, China's July 2024 green and low-carbon development action plan for data centers, and India's emphasis on liquid-cooling methods that can reduce water consumption.
Operators must balance thermal performance, reliability, resource consumption, operating costs and infrastructure limits. Liquid cooling can require specialized equipment and modifications to existing facilities, while maintenance and integration with legacy systems can increase operating requirements. Water constraints, energy consumption and sustainability reporting add further design and operational responsibilities.
The report identifies rising data center capacity, AI and high-performance computing, energy-efficiency initiatives, regulatory requirements, advances in liquid cooling, and investment in hyperscale and colocation facilities as key growth drivers. It also cites India's installed data center capacity, which grew from approximately 375 MW in 2020 to around 1,500 MW by 2025.
Recent industry moves include Vertiv's November 2026 ecosystem offering with Dow and Solenis, Daikin's October 2026 coolant distribution units reaching 2.5 MW per unit, and Carrier's plan to invest more than $600 million over three years in a manufacturing and engineering center in Fort Worth, Texas. For data center operators, the market's direction points to a more varied cooling mix, with air remaining important while liquid systems address the highest-density AI loads.
