Data Center Thermal Management Market to Reach $32.38 Billion by 2032, Driven by AI Workloads and Liquid Cooling Adoption

The global data center thermal management market is set to more than double in size over the next six years, according to a new report from MarketsandMarkets™. The market is projected to grow from USD 13.24 billion in 2026 to USD 32.38 billion by 2032, representing a compound annual growth rate (CAGR) of 16.1% during the forecast period.

The growth is being fueled by several converging trends: rising rack power densities, the accelerating adoption of liquid cooling technologies, the expansion of hyperscale and AI-enabled data centers, and a growing industry-wide push for energy-efficient cooling solutions. As AI workloads place unprecedented demands on computing infrastructure, traditional air-based cooling is increasingly struggling to keep pace, prompting operators to turn to more advanced thermal management approaches.

Liquid cooling systems accounted for the largest share of the market by component, representing 30.4% of value in 2025, and are expected to maintain their dominance throughout the forecast period. The shift is driven by modern processors and AI accelerators that generate significantly more heat than earlier technologies. Direct-to-chip cooling, immersion cooling, and liquid-to-liquid systems are becoming essential for maintaining optimal operating temperatures, enhancing server performance, and ensuring long-term equipment reliability. Major cloud providers including Amazon Web Services (AWS), Microsoft, Google, Meta, and Oracle are increasingly developing AI-ready facilities where rack power densities often exceed 50–100 kW—levels at which traditional air cooling proves ineffective. Liquid cooling not only enables these high-density setups to operate properly but also reduces cooling energy consumption, improves Power Usage Effectiveness (PUE), and allows operators to increase server utilization.

Hyperscale data centers represent the largest end-user segment, accounting for 44.2% of the market by value in 2025. The rapid expansion of hyperscale cloud infrastructure, combined with growing demands from AI workloads, high-performance computing (HPC), and large colocation facilities, is driving significant investment in advanced cooling infrastructure. Operators are implementing comprehensive thermal management solutions—including direct-to-chip liquid cooling, immersion cooling, computer room air conditioners (CRACs), computer room air handlers (CRAHs), coolant distribution units (CDUs), precision cooling systems, chillers, heat exchangers, cooling towers, and AI-powered thermal monitoring platforms—to support rack power densities exceeding 100 kW.

North America is poised to lead the global market throughout the forecast period, with the region expected to grow at a CAGR of 18.6%, the fastest among all regions. The region benefits from a well-established digital infrastructure, a high concentration of hyperscale data centers, and rapidly increasing investments in AI, cloud computing, and HPC. Major technology companies such as AWS, Microsoft, Google, Meta, Oracle, and CoreWeave are headquartered in North America and are continually expanding their AI-ready data center capacity. The region is also an early adopter of next-generation cooling technologies, including direct-to-chip liquid cooling, immersion cooling, and AI-enabled thermal monitoring platforms.

In terms of end-user industries, the banking, financial services, and insurance (BFSI) sector was the largest segment, accounting for 20.4% of market value in 2025. Room-based cooling is expected to lead the market by cooling type during the forecast period.

Key players identified in the report include Vertiv Group Corp (US), Johnson Controls, Inc. (US), Schneider Electric (France), Carrier (US), and Daikin Industries Ltd. (Japan). Emerging startups and SMEs such as CoolCentric and Iceotope Precision Liquid Cooling are also securing strong footholds in specialized niche areas, underscoring their potential as emerging market leaders.

As AI and high-performance computing workloads continue to intensify, the data center thermal management market is positioned for sustained growth. The transition from air-based to liquid-based cooling solutions represents a fundamental shift in how data centers manage heat, with implications for facility design, energy efficiency, and overall operational performance. Operators that adopt advanced thermal management strategies will be better positioned to meet the demands of next-generation computing infrastructure while reducing their environmental footprint.