North America Leads Global Expansion with 26 Percent Y/Y Growth as Hyperscalers Accelerate AI Buildouts
REDWOOD CITY, Calif. – December 10, 2025 – According to a new report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, the worldwide Data Center Physical Infrastructure (DCPI) market grew 18 percent year-over-year in 3Q 2025 in manufacturer revenue. Momentum remained broad-based, supported by strong AI infrastructure buildouts and the steady conversion of multi-year deployment plans into active projects. These trends continue to reinforce the view that data centers remain central to digital innovation and long-term capacity expansion.
“Operators are scaling capacity at unprecedented speed, and both power and cooling architectures are evolving to keep pace with AI-era requirements,” said Alex Cordovil, Research Director at Dell’Oro Group. “The recent wave of M&A underscores how heated the market has become, with vendors racing to expand thermal and power capabilities to meet rapidly rising customer demands. Direct liquid cooling is consolidating as the architecture of choice, while higher-voltage and DC power designs are beginning to shape the next phase of data center development.”
Additional highlights from the 3Q 2025 Data Center Physical Infrastructure Quarterly Report:
- Thermal Management delivered strong growth, with Direct Liquid Cooling expanding 85 percent Y/Y and on pace to exceed $2 billion in yearly revenue as adoption broadens across large AI clusters.
- Hyperscalers remained the core demand engine, with the Top 10 Cloud segment growing by more than 30 percent worldwide and posting even stronger gains in North America.
- Open standards gained influence, with new specifications introduced at the Open Compute Project (OCP) summit driving greater alignment across operators and vendors. The latest high-voltage and DC power architectures, along with the Deschutes open CDU specification, are accelerating ecosystem maturation and lowering barriers to qualification.
- Industry consolidation accelerated, including acquisitions by Eaton (Boyd Thermal), Vertiv (PurgeRite), and Daikin (Chilldyne), underscoring the race to build scale and secure liquid-cooling and power capabilities.
- Emerging competitors continued to gain momentum, with Aaon scaling its data center thermal business by an order of magnitude within a few quarters, supported by a very healthy backlog as hyperscalers broaden their supplier base. Modine also strengthened its position, securing notable hyperscale wins that reinforce its rising relevance in large AI campus deployments.
- Market outlook remains robust, with DCPI revenue expected to sustain a high-teens Y/Y growth trajectory through 4Q 2026. Architectural transitions—including higher-voltage distribution, emerging DC power topologies, and rapid maturation of liquid-cooling ecosystems—are poised to reshape data center infrastructure in the second half of the decade.
Dell’Oro Group’s Data Center Physical Infrastructure quarterly report provides a complete overview of the Data Center Physical Infrastructure market. This covers market sizes and forecasts for uninterruptible power supplies (UPS), thermal management, cabinet power distribution and busway, rack power distribution, IT racks and containment, and software and services. Allocation of manufacturing revenues by cloud service providers, telco, colocation, and enterprise customer segments is also provided. The report also shares insights into market trends, future outlook, and competitive landscape. For more information about the report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
# # #
