Data Center Liquid Cooling Market to Approach $7 Billion by 2029 as AI Deployments Accelerate, According to Dell'Oro Group

Single-Phase Direct Liquid Cooling Remains Dominant Amid Rapid Innovation and Market Realignment

REDWOOD CITY, Calif., Jan. 8, 2026 /PRNewswire/ -- According to a newly published report from Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the worldwide Data Center Liquid Cooling market is expected to grow rapidly through the end of the decade, reaching approximately $7 billion in manufacturer revenue by 2029. The expansion reflects liquid cooling's transition from a niche technology to a foundational requirement for deploying next-generation AI infrastructure, as rising accelerator thermal design power (TDP) and rack densities push air cooling beyond practical limits.

"Liquid cooling has crossed a critical threshold," said Alex Cordovil, Research Director at Dell'Oro Group. "What was once treated as an optional efficiency upgrade is now a functional requirement for large-scale AI deployments. While the liquid cooling landscape is evolving rapidly—driven by innovation in cold plates, coolant distribution, and system architectures—single-phase direct liquid cooling has consolidated its position as the dominant architecture for AI clusters, supported by hyperscaler experience and accelerating vendor investment."

The report highlights how hyperscalers continue to anchor demand for liquid cooling, accounting for a substantial share of market revenue, with a significant portion of the remainder tied to deployments in colocation facilities—often purpose-built to support AI workloads. At the same time, the ecosystem is undergoing rapid change, with new entrants, expanding vendor capabilities, and increased merger-and-acquisition activity reshaping the competitive landscape. Despite this dynamism, single-phase direct liquid cooling is expected to remain the prevailing architecture for most deployments through the end of the decade, with alternative approaches gaining traction more selectively as technical thresholds are reached.

Additional highlights from the Data Center Liquid Cooling Advanced Research Report include:

• The Liquid Cooling market is expected to roughly double in 2025, reaching close to $3 billion in revenue, before continuing to scale toward approximately $7 billion by 2029.
• While the accelerator landscape is broadening with more GPUs and custom ASICs, TDPs of leading-edge GPUs are projected to exceed 4,000 W by 2029, reinforcing liquid cooling's role as a structural requirement.
• Single-phase direct liquid cooling accounts for the vast majority of liquid-cooled capacity coming online today, with its continued dominance expected to hinge on anticipated advances in cold plate design as heat loads from next-generation accelerator chips continue to rise.
• Two-phase direct liquid cooling is expected to expand gradually, with adoption accelerating once chip-level TDPs and thermal flux exceed the practical limits of single-phase systems. Until then, deployments are likely to remain focused on pilots and early large-scale implementations. Immersion cooling, by contrast, is finding its place through selective adoption, where its architectural trade-offs are justified by performance or operational requirements.
• The competitive landscape is evolving rapidly, with Vertiv leading the liquid cooling market and established players such as CoolIT, nVent, and Boyd maintaining strong market share positions. At the same time, Aaon has delivered rapid growth, highlighting how deep hyperscaler partnerships and the ability to deliver highly customized solutions can quickly translate into market share gains.

About the Report

Dell'Oro Group's Data Center Liquid Cooling Advanced Research Report provides a detailed five-year forecast and competitive analysis of the global liquid cooling market. The report covers market sizing and outlook by product type, customer segment, and heat-transfer architecture, along with in-depth analysis of technology trends, vendor strategies, and evolving system designs across direct liquid cooling, immersion cooling, and rear-door heat exchangers. For more information about the report, please contact us at dgsales@delloro.com.

About Dell'Oro Group

Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit www.delloro.com. 

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SOURCE Dell'Oro Group