Data centre liquid cooling market set for rapid growth

MarketsandMarkets forecasts that the global data centre liquid cooling market will grow from USD $4.07 billion in 2026 to USD $27.65 billion by 2033, at a compound annual growth rate of 31.5%.

Rising demand for high-density computing is a key driver of that growth, as data centre operators face heavier thermal loads from artificial intelligence, big data and cloud workloads. Liquid cooling is drawing more attention as operators seek alternatives to conventional air cooling for servers equipped with more powerful GPUs and CPUs.

The outlook also reflects a broader shift in data centre design. Direct-to-chip and immersion cooling are gaining traction because they remove heat more efficiently in dense computing environments. At the same time, operators are under pressure to curb electricity use and reduce water consumption.

Growth in edge computing and the spread of connected devices are adding to that pressure. Smaller facilities and distributed computing sites often face tighter space constraints, making compact liquid cooling systems more attractive than traditional cooling setups.

Services growth

Within the market, the services segment is expected to record the fastest growth among component categories. The forecast points to rising demand for specialist installation, maintenance and consulting as liquid cooling systems become more complex and require expertise many operators do not have in-house.

Ongoing support is also likely to become more important as organisations try to maintain performance and meet energy and sustainability targets. That trend is expected to be especially visible in edge deployments, where operators may need external help to manage cooling across distributed sites.

Data centre types

By facility size, small and mid-sized data centres are expected to post the fastest growth rate. These facilities often operate with limited space, increasing the appeal of direct-to-chip and immersion systems that deliver stronger cooling performance in a smaller footprint.

Hyperscale data centres are also forecast to record the highest CAGR in their category, reflecting continued investment in large-scale infrastructure for cloud services, artificial intelligence and data analysis. The report links that growth to demand for scalable platforms that can support intensive workloads while keeping energy use under tighter control.

Together, these trends highlight the breadth of the market. Liquid cooling is no longer limited to the largest operators, but is also becoming more relevant at the top end of the market, where heat density and power consumption are rising sharply.

Sector demand

Among end-use industries, IT and telecom is forecast to grow the fastest. Continued digital transformation, the spread of cloud computing and wider use of artificial intelligence are driving demand for infrastructure that can process and store more data without overheating.

The rollout of 5G networks adds another source of demand by increasing bandwidth requirements and expanding the need for data centre capacity. A growing number of connected devices is also increasing the need for cooling systems that can scale with computing demand.

Technology shift

Direct-to-chip cooling is expected to be the fastest-growing technology segment between 2026 and 2033. The approach cools components such as CPUs and GPUs at the source, improving thermal management for workloads that generate far more heat than earlier generations of equipment.

Improvements in cold plate design are helping the segment gain ground over air cooling. Operators are also paying closer attention to energy use, and the report suggests direct-to-chip systems are benefiting as data centre owners look to lower operating costs and emissions.

Regional outlook

North America is expected to be the largest regional market during the forecast period. The region's position reflects strong demand for cloud services, major data centre investment programmes and growing use of edge and IoT applications in the US and Canada.

Government policies that support energy efficiency and sustainability are also helping advanced cooling systems gain traction in the region. Investment by both established technology groups and newer market participants is expected to reinforce that trend as operators look for ways to improve efficiency in increasingly dense computing environments.

The market's projected expansion suggests liquid cooling is moving from a specialist option to a more mainstream part of data centre design, particularly as operators weigh heat management, energy use and the demands of AI-led infrastructure growth.