AI Compute and Regulatory Pressures Catalyze Fourfold Adoption of Liquid Cooling Technology in Data Centers by 2030

Data Center (DC) cooling prioritizes IT equipment over occupants, with Artificial Intelligence (AI) and digitalization driving rack densities beyond 50KW. Advanced cooling solutions near heat sources are increasingly critical. Global technology intelligence firm ABI Research projects DC HVAC hardware shipment revenue to rise from US$6.6 billion in 2023 to US$16 billion by 2030 (a 14% CAGR). Liquid cooling, currently 15% of the DC HVAC market at US$970 million, is forecast to reach US$3.5 billion by 2030 at a 20% CAGR.

Data centers (DCs) typically require cooling capacities of 500–1,000 tons, achieved through hardware and software systems. “To manage rising heat from increased compute power, operators are adopting a two-step cooling approach: server-level liquid cooling supported by air-cooled HVAC systems. Currently, 20% of DC operators, mainly hyperscalers, are piloting liquid and immersion cooling systems, with adoption expected to exceed 55% by 2030 due to growing AI and compute demands. Key drivers include the need for greater compute power, regulatory pressures on energy efficiency, water usage, sustainability, and the limitations of air-cooling. Efficient thermal management is critical to performance, stability, and equipment lifespan," explains Rithika Thomas, Senior Analyst for Sustainable Technologies at ABI Research.

Johnson Controls, Schneider Electric, and Vertiv control over 30% of the DC cooling market, followed by established HVAC providers like Carrier, Danfoss, Daikin, Rittal, STULZ, and Trane. Recent developments include Schneider Electric acquiring a majority stake in Motivair to enhance its liquid cooling and thermal management offerings for high-performance computing, and Vertiv partnering with Compass Data Centers to pilot advanced liquid and air-cooling solutions for AI-focused data centers. "The DC cooling market, a specialized segment of the commercial HVAC sector, is set for rapid growth as HVAC providers expand into liquid cooling to meet evolving market demands,” Thomas says.

Currently, the top hyperscalers consume or offset at least 88% of their total energy consumption with renewables. Amazon, Alibaba Cloud, Equinix, Google, Meta, and Apple operate on 100% low carbon energy with Global Switch, Equinix, and Microsoft Azure operating with 96% of low carbon energy capacity. “Hyperscalers are facing increased regulatory pressure to curb energy, water consumption and achieve climate neutrality by 2030, paving the wave for sustainable DC operations. This is encouraging DC operators to adopt cooling technologies with high hardware efficiency metrics, embedding innovative cooling strategies, and software tools to optimize thermal management and increase IT equipment lifecycle while doubling down on renewable/low carbon energy sources to reduce DC carbon footprint, concludes Thomas.

These findings are from ABI Research’s Optimizing Data Center Infrastructure: Market Sizing Thermal Management & Energy Consumption report. This report is part of the company’s Smart Buildings research service, which includes research, data, and ABI Insights.