Data Centre Liquid Cooling Market - Strategic Insights and Forecasts (2026-2031)

The Data Centre Liquid Cooling Market is expected to grow at a CAGR of 22.9% from USD 3.75 billion in 2026 to USD 10.5 billion by 2031.

The data centre liquid cooling market refers to using liquid-based cooling systems to manage the temperature of data centres. As data centres have become increasingly important for businesses and organizations, the demand for more efficient cooling solutions has grown. As a result, liquid cooling has emerged as a viable alternative to traditional air-based cooling systems due to its higher efficiency, lower energy consumption, and greater capacity to manage heat.

This technology uses liquid coolants such as water, refrigerants, or dielectric fluids to absorb and remove heat from IT equipment. The liquid is then circulated through a heat exchanger or chiller, cooled, and returned to the IT equipment, completing the cooling cycle. The liquid cooling approach can enable data centres to operate more efficiently, reduce their carbon footprint, and improve IT equipment's overall performance and lifespan. As a result, the data centre liquid cooling market is expected to grow as more data centres are built and businesses seek to optimize their operations.

Data Centre Liquid Cooling Market Drivers:

The data centre liquid cooling market is driven by the rising demand due to increasing heat generation, server density, and demand for colocation services.

• Rising demand due to increasing heat generation - With the rise of high-density computing and processing, data centres are generating more heat than ever. Traditional air-cooling systems are struggling to keep up with the cooling demands of modern IT equipment, leading to the adoption of liquid cooling systems. The US Department of Energy's (DOE) Lawrence Berkeley National Laboratory found that liquid cooling can reduce cooling energy consumption by up to 90% compared to air cooling systems. The study also found that liquid cooling can enable data centres to operate at higher temperatures, leading to additional energy savings.

• Increasing server density and demand for colocation services - As data centre operators look to maximize their floor space, they are increasing server density. This means more servers are being packed into smaller areas, which can generate more heat. Liquid cooling systems can help to manage this heat more effectively than traditional air-cooling systems. The increasing demand for colocation services also drives the adoption of liquid cooling systems. Colocation providers are looking for ways to differentiate themselves from their competitors, and offering more efficient and sustainable cooling solutions is one way to do this.

Data Centre Liquid Cooling Market Developments:

• April 2026: Carrier Global announced expanded investment in ZutaCore to scale direct-to-chip liquid cooling solutions, strengthening its QuantumLeap™ platform and supporting high-density AI data centres with advanced thermal management capabilities.

• March 2026: UNICOM Engineering and GRC expanded collaboration to deliver turnkey immersion-cooled data centre solutions, enabling scalable deployment of high-density AI and HPC workloads with improved efficiency and reduced energy consumption.

• November 2025: Green Revolution Cooling (GRC) launched ICEraQ™ Nano immersion cooling system, enabling compact deployments delivering up to 13 kW cooling without chilled water, simplifying edge and small data centre liquid cooling adoption.

• November 2025: Vertiv announced acquisition of PurgeRite for approximately $1 billion, expanding liquid cooling service capabilities and strengthening its position in advanced thermal management solutions for AI-driven data centre infrastructure.

• October 2025: Johnson Controls announced a multi-million dollar strategic investment in Accelsius, advancing two-phase direct-to-chip liquid cooling technology designed to reduce energy consumption and improve efficiency in high-performance AI data centres.

Segment Analysis:

Based on the industry vertical, the communication and technology segment will witness robust growth over the projected period.

The adoption of liquid cooling technology in communication and technology data centers is driven by the need to manage the high heat generated by high-performance computing infrastructure. Liquid cooling solutions, such as immersion and direct contact liquid cooling, enable efficient and sustainable management of this heat, resulting in improved energy efficiency, reduced power consumption, and lower operating costs.

Geographical Outlook:

Asia Pacific accounted for a significant share of the global data centre liquid cooling market.

Based on geography, the data centre liquid cooling market is segmented into North America, South America, Europe, the Middle East and Africa, and Asia Pacific.

The Asia Pacific data centre liquid cooling market is expected to grow quickly during the projected period, driven by the increasing demand for cloud-based services, digitalization, and e-commerce.

The region is witnessing significant growth in countries such as China, India, and Japan. China, the region's largest data center market, has a high demand for liquid cooling solutions due to the country's strict energy consumption regulations. Japan is also a significant market due to its high adoption of IoT, artificial intelligence, and big data technologies. Additionally, the region is witnessing increased investments in renewable energy sources, expected to drive market growth.

Data Centre Liquid Cooling Market Scope: