According to the latest report, ‘2025 Global Data Center Outlook,’ by Jones Lang LaSalle IP, Inc. (JLL) that explores how AI is not only driving demand but the development of more powerful and efficient data center infrastructure that balances computing power and sustainability, “Artificial intelligence applications are rapidly expanding across industries, and the global data center industry plays a critical role in AI adoption and advancement. To meet the exponential data center demand, the sector will grow at a phenomenal pace in 2025.”
Before proceeding further, let us have a brief look at what a data center is, and what its connection is with the global temperature rise. Although there are many definitions of data centers, perhaps the definition given by the Amazon Web Services, Inc., (AWS) is the most precise and comprehensive. According to AWS, “A data center is a physical location that stores computing machines and their related hardware equipment. It contains the computing infrastructure that IT systems require, such as servers, data storage drives, and network equipment. It is the physical facility that stores any company’s digital data.”
Nowadays, we often come across the phrase ‘cloud computing’. In the current scenario, many companies are switching to cloud-based services that they find hassle-free – as they are relieved from the headache of maintaining their own hardware and software, enjoying automatic updates, data backups, and accessibility from any device with just an internet connection. However, these vendors offering cloud services also maintain their own data centers, which may be located at multiple locations far away from the service receivers’ locations.
In any case whether an organization sets up its own on-premises data center or it uses a cloud service, definitely somewhere one data center is actively involved. And it consumes power as well as produces heat. There lies the growing challenge.
As per the recent report by the market analyst firm Research And Markets, titled, Mega Data Center Market 2025-2033, “The global mega data center market size reached USD 26.8 billion in 2024. Looking forward, the market is forecast to reach USD 40.6 billion by 2033, exhibiting a growth rate (CAGR) of 4.7% during 2025-2033. The market is driven by the increasing demand for cloud services, growth of big data analytics, rising adoption of Artificial Intelligence (AI) and Machine Learning (ML), heightened investment in the renewable energy sector, and the burgeoning focus on edge computing.”
What about the ‘heat production’ scenario? So far there is no acceptable estimation. However, from many reported case studies, we can make out the severity of the amount of heat that will be produced from data centers in the coming days. For example: a case reported by the global green data center operator company Verne, states, “At our Helsinki data center campus we have been able to put a heat recovery system into action. Utilizing air cooling methods, we extract excess heat from the hot return air and transfer it to water. The water is then elevated from around 30⁰C to a temperature suitable for the district heating company, typically exceeding 90⁰C. For every 1MW of IT power allocated to servers, the data center generates 1.3MW of heat. Remarkably, the system incurs minimal energy losses, just a few per cent, showcasing its efficiency.”
Global data center cooling market
According to BIS Research, “The global data center cooling market is projected to reach $107.13 billion by 2034 from $21.50 billion in 2023, growing at a CAGR of 15.72% during the forecast period 2024-2034. The growth in the global data center cooling market is expected to be driven by the increasing number of data centers and government initiatives for energy-efficient data centers. The need to address the water scarcity issue has further resulted in the adoption of data center cooling technologies.”
Different types of prevailing cooling processes
A recent report by Research And Markets communicates, “As data centers generate substantial heat, advanced cooling systems are essential for maintaining optimal temperatures and preventing equipment failure. The market encompasses various cooling methods, including air, liquid, and free cooling systems, each suited to different data centers, such as hyperscale, colocation, and edge facilities. Demand for efficient cooling technologies is intensifying with the rise of data-intensive applications such as Artificial Intelligence (AI), big data, and cloud computing. Liquid cooling solutions, particularly direct-to-chip and immersion cooling, are gaining traction due to their superior heat management and sustainability benefits. This market is expected to increase, with companies investing in innovative cooling technologies to reduce operational costs and environmental impact.”
Liquid cooling to dominate the market
The recent report by the market research and consulting firm Insightace Analytic Pvt Ltd., notes, “Data center liquid cooling improves performance and efficiency by dissipating server heat using liquids like water or dielectric fluids. The market for liquid cooling in data centers is growing because more people want high-performance computing, artificial intelligence, and cloud services. These technologies produce a lot of heat and need good cooling systems. Moreover, concerns about energy efficiency and the growing number of data centers are pushing companies toward liquid cooling, which is better at controlling temperature than standard air cooling.”
According to their research, “The Global Data Center Liquid Cooling Market Size was valued at USD 4,461.2 million in 2023, and is predicted to reach USD 30,612.4 million by the year 2031 at a CAGR of 27.47% during the forecast period for 2024-2031.”
Corroborating the same view, the JLL report states that at the core of the AI revolution is the rapid advancement in semi-conductor technology. Over the past two years, GPUs have become substantially more powerful, leading to higher rack densities ranging from 40 kW to 130 kW per rack, with future chips projected to reach an astounding 250 kW per rack.
GPU innovation presents a significant hurdle: managing the heat generated by densely packed, energy-intensive GPUs. The necessity to keep this tech cooled and load variability stable, combined with new Power Usage Effectiveness (PUE) regulations, will shift thermal management strategies toward liquid cooling as the standard for new data center developments. In the future, immersion cooling will become a common solution as GPUs surge past 150 kW.
Most new data centers are being designed to house a combination of both AI and traditional workloads. Though a significant driver, even optimistic adoption scenarios suggest that AI will represent less than 50% of data center demand in 2030, with traditional, lower-intensity workloads like data storage and cloud-based applications comprising most of the demand.
Focusing on the transformation, Andrew Green, JLL Regional Data Center Practice Lead, Asia Pacific, informed, “While not every data center is or will be a specialized AI facility, all data centers – new and existing – can benefit from more energy efficient operations and improved technology integration. Data center operators must contend with the demand for massive power needs while satisfying the need for more energy efficient facilities. AI is transforming data center management through predictive maintenance applications, which optimize energy usage, leading to longer lifespans for equipment and resulting in less down time.”
The Research And Market’s report too is projecting the high growth potential of the liquid cooling market. Their report states that the global data center liquid cooling market, valued at $5.65 billion in 2024, is expected to reach $48.42 billion by 2034, exhibiting a robust CAGR of 23.96% during the forecast period 2024-2034.
The data center liquid cooling market has been experiencing rapid growth, driven by the rising demand for energy-efficient and sustainable cooling solutions to support High-Performance Computing (HPC), Artificial Intelligence (AI), and hyperscale data centers. Key drivers include the proliferation of advanced technologies such as immersion and direct-to-chip cooling, which offer superior thermal efficiency and reduced power consumption compared to traditional air-cooling systems.
Regulatory pressures to reduce carbon footprints and achieve net-zero goals are encouraging adoption alongside advancements in liquid cooling systems that facilitate higher server densities and operational reliability. Industry players are innovating with sustainable cooling fluids and scalable solutions tailored to emerging AI workloads and 5G applications.
By P. K. Chatterjee (PK)
