Data Center
Worldwide spending on data centre physical infrastructure is expected to grow at a mid-teens compound annual growth rate between 2025 and 2030, pushing the market beyond $80 billion, according to a new forecast from Dell'Oro Group.
The firm said demand for data centre capacity remains exceptionally strong, driven largely by artificial intelligence workloads. However, power availability is emerging as a critical constraint on near-term expansion, forcing operators to rethink how large-scale AI facilities are designed and powered.
“The data centre physical infrastructure market is undergoing a period of profound structural transformation,” said Alex Cordovil, Research Director at Dell’Oro Group. Rising chip thermal design power and the industry’s move toward one-megawatt racks are triggering fundamental changes across facility design, he said, even as operators find creative ways to bring new capacity online.
Dell’Oro said these mitigation strategies, including alternative power sourcing and redesigned cooling architectures, prompted the firm to raise its growth outlook for the DCPI market for the 2025–29 period.
One of the most significant shifts highlighted in the report is the rapid growth of advanced cooling technologies. Thermal management is forecast to expand at around 20% annually and is expected to match the size of the uninterruptible power supply (UPS) market by the end of the decade. Cooling, once a supporting function, is now becoming a primary determinant of data centre design as AI workloads generate far higher heat densities.
Direct liquid cooling is projected to be a major beneficiary of this transition, with the segment expected to exceed $8 billion by 2030. Dell’Oro said liquid cooling is moving from a niche enabler to a foundational technology for so-called AI factories. New compute designs, including fanless architectures, are accelerating the shift toward fully liquid-cooled configurations.
Power distribution inside data centres is also evolving. Spending on cabinet power distribution units (PDUs) and busway systems is expected to rise as overhead busways become the standard architecture for slab-based AI facilities. The report added that emerging direct-current power distribution models could begin influencing deployment choices toward the end of the decade.
The research shows a widening gap between service providers and enterprises in infrastructure spending. Cloud, colocation and so-called neocloud operators are forecast to increase DCPI investment at roughly five times the rate of enterprise data centre operators, reflecting the growing scale, complexity and capital intensity of AI-ready infrastructure.
Power availability remains the most binding constraint on growth. Grid interconnection delays and transmission bottlenecks are driving strong demand for on-site power generation, including natural gas turbines and reciprocating engines. Dell’Oro said such systems are increasingly being deployed not as backup solutions, but as primary enablers to bring multi-hundred-megawatt and gigawatt-scale AI campuses online.
The report underscores how the AI boom is reshaping every layer of data centre infrastructure, from cooling and power to physical layout, as operators race to balance explosive demand with real-world energy constraints.
The firm said demand for data centre capacity remains exceptionally strong, driven largely by artificial intelligence workloads. However, power availability is emerging as a critical constraint on near-term expansion, forcing operators to rethink how large-scale AI facilities are designed and powered.
“The data centre physical infrastructure market is undergoing a period of profound structural transformation,” said Alex Cordovil, Research Director at Dell’Oro Group. Rising chip thermal design power and the industry’s move toward one-megawatt racks are triggering fundamental changes across facility design, he said, even as operators find creative ways to bring new capacity online.
Dell’Oro said these mitigation strategies, including alternative power sourcing and redesigned cooling architectures, prompted the firm to raise its growth outlook for the DCPI market for the 2025–29 period.
One of the most significant shifts highlighted in the report is the rapid growth of advanced cooling technologies. Thermal management is forecast to expand at around 20% annually and is expected to match the size of the uninterruptible power supply (UPS) market by the end of the decade. Cooling, once a supporting function, is now becoming a primary determinant of data centre design as AI workloads generate far higher heat densities.
Direct liquid cooling is projected to be a major beneficiary of this transition, with the segment expected to exceed $8 billion by 2030. Dell’Oro said liquid cooling is moving from a niche enabler to a foundational technology for so-called AI factories. New compute designs, including fanless architectures, are accelerating the shift toward fully liquid-cooled configurations.
Power distribution inside data centres is also evolving. Spending on cabinet power distribution units (PDUs) and busway systems is expected to rise as overhead busways become the standard architecture for slab-based AI facilities. The report added that emerging direct-current power distribution models could begin influencing deployment choices toward the end of the decade.
The research shows a widening gap between service providers and enterprises in infrastructure spending. Cloud, colocation and so-called neocloud operators are forecast to increase DCPI investment at roughly five times the rate of enterprise data centre operators, reflecting the growing scale, complexity and capital intensity of AI-ready infrastructure.
Power availability remains the most binding constraint on growth. Grid interconnection delays and transmission bottlenecks are driving strong demand for on-site power generation, including natural gas turbines and reciprocating engines. Dell’Oro said such systems are increasingly being deployed not as backup solutions, but as primary enablers to bring multi-hundred-megawatt and gigawatt-scale AI campuses online.
The report underscores how the AI boom is reshaping every layer of data centre infrastructure, from cooling and power to physical layout, as operators race to balance explosive demand with real-world energy constraints.
See What’s Next in Tech With the Fast Forward Newsletter
Tweets From @varindiamag
Nothing to see here - yet
When they Tweet, their Tweets will show up here.
