Data Center Physical Infrastructure Grows 18 Percent Y/Y in Q2 2025, Reports Dell’Oro Group

According to a report from Dell’Oro Group, the global Data Center Physical Infrastructure market grew 18% year-over-year in Q2 2025, largely due to the demand from Artificial Intelligence (AI) developments. This growth is attributed to the increasing popularity of Direct Liquid Cooling (DLC) technology in AI clusters.

Product Update

DLC recorded a 156% year-over-year increase, establishing itself as the standard for large AI implementations. Alex Cordovil, a Research Director at Dell’Oro Group, noted that hyperscalers and colocation providers have rapidly expanded capacity, contributing to a significant shift in cooling technology.

Market Trends

Thermal management solutions expanded by 29% year-over-year, indicating a robust growth trend. Power distribution markets also saw a 26% increase due to the adoption of advanced infrastructure solutions, such as overhead busways.

Regional Insights

North America experienced the strongest market growth at 23% year-over-year, spurred by substantial projects in data center capacity. EMEA and Asia Pacific regions lagged but are projected to show increased activity moving forward.

Customer Use Case

Hyperscalers and colocation providers represented over 80% of market expansion, demonstrating their central role in the ongoing AI cycle. Companies offering a range of infrastructure solutions, including Vertiv and Munters, benefited from the current market dynamics.

Conclusion

This report highlights the ongoing growth in the Data Center Physical Infrastructure sector, driven primarily by AI-related demand. The insights provided by Dell’Oro Group reflect current market conditions and expectations for future developments.