Data Centre Liquid Cooling Market Hitting $7 Billion by 2029 – Led by Hyperscaler Demand

Executive Summary

• Worldwide data centre liquid cooling will be a near $7bn market by 2029 according to Dell’Oro Group
• Single-phase direct liquid cooling remains dominant for AI clusters, driven by hyperscaler experience and accelerating vendor investment
• Liquid cooling is transitioning from a niche to a ‘foundational requirement for deploying next-generation AI infrastructure’

The global data centre liquid cooling market will reach $7 billion (£5.2bn) by 2029 led by AI, according to a report from Dell’Oro Group.

The analyst argues that the rapid growth ‘reflects liquid cooling’s transition from a niche technology to a foundational requirement for deploying next-generation AI infrastructure.’

Single-phase direct liquid cooling makes up the ‘vast majority’ of liquid-cooled capacity coming online today, according to the report. Whether it remains so depends on anticipated advances in cold plate design, according to the report.

Adoption of two-phase direct liquid cooling, a more advanced system which uses non-conductive and non-corrosive fluids which evaporate on contact with the hot chip, is expected to be gradual until chip-level TDPs and thermal flux ‘exceed the practical limits of single-phase systems’, Dell’Oro notes.

An article from IDTechEx in October posited that two-phase direct-to-chip cooling is ‘expected to enter large-scale deployment around 2027.’ “While two-phase cooling offers clear efficiency benefits, its environmental and cost implications make it a complex choice,” the article noted. “Nevertheless, with careful system design, many of these challenges can be mitigated.”

Hyperscaler demand, not surprisingly, represents a ‘substantial’ share of market revenue. Much of the remaining share is through colocation facilities, many of which are purpose-built to support AI workloads. Vertiv is the current market leader, according to Dell’Oro figures.

“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,” Cordovil added.