Dell’Oro Group raises market forecast for liquid cooling and rack power distribution

According to a recently published report from Dell’Oro Group, it has raised its forecast of the Data Center Liquid Cooling and Rack Power Distribution segments of the Data Center Physical Infrastructure (DCPI) market. We are now predicting DCPI market revenues to increase at a 14 percent CAGR from 2024 to 2029, to $61 B.

“We raised our outlook as a result of three factors,” said Tam Dell’Oro, Founder of Dell’Oro Group. “First, actual results through 2024 exceeded our predictions, second, shipments of accelerated computing (and high-end GPUs), designed to handle AI workloads exceeded our prior forecast and we have learned that demand—which remains robust—is spreading from Tier 1 to Tier 2 Cloud Service Providers. Third, governments and Tier 1 Telecom Operators are becoming involved in enabling data center expansion, which means this is a long-term trend. DCPI deployments are a prerequisite to support AI workloads.

“The proliferation of accelerated computing to support AI and ML workloads has emerged as a major DCPI market driver which is significantly increasing data center power and thermal management requirements. For example, the average rack power density today is around 15 kW/rack, but AI workloads will require 60 – 120 kW/rack to support accelerated servers in close proximity. While this jump in rack power density will trigger innovation and product development on the power distribution side, a bigger change is unfolding in thermal management – the transition from air to liquid cooling,” added Dell’Oro.

Additional highlights from the Data Center Physical Infrastructure 5-Year January 2025 Forecast Report:

• Forecast strong growth in 2025 and 2026, as Tier 1 and some Tier 2 Service Providers deploy “at-scale” accelerated computing and the DCPI infrastructure to support it.

• Asia Pacific (excluding China), North America and Europe, the Middle East, and Africa (EMEA) are forecast to grow at the fastest CAGRs during the forecast period.

• Although the Top 10 Cloud SPs will build purpose-built facilities for AI inferencing, Colocation (wholesale and retail) to play a bigger role in building AI inferencing facilities over the long term.

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