Data Center Physical Infrastructure market grows 18% year-over-year in Q2 2025, says Dell’Oro Group

The Data Center Physical Infrastructure market reported an 18% year-over-year growth for Q2 2025, primarily due to demand associated with developments in Artificial Intelligence (AI). This trend highlights the increasing adoption of advanced cooling technologies, particularly Direct Liquid Cooling (DLC) systems, within AI clusters.

Product Update

DLC technology experienced a substantial 156% year-over-year growth, suggesting its establishment as a standard for large-scale AI projects. Alex Cordovil, a Research Director at Dell’Oro Group, indicated that hyperscalers and colocation providers are enhancing their capacities, marking a notable shift in cooling approaches.

Market Trends

Thermal management solutions saw a 29% year-over-year increase, reflecting strong market growth. Additionally, power distribution segments rose by 26% due to the implementation of advanced infrastructure solutions, including overhead busways.

Regional Insights

North America led market growth with a 23% year-over-year increase, fueled by significant data center capacity projects. The EMEA and Asia Pacific regions, while experiencing slower growth, are expected to see increased activity in the near future.

Customer Use Case

Hyperscalers and colocation providers accounted for over 80% of the market expansion, underscoring their pivotal role in the AI development cycle. Companies like Vertiv and Munters have benefitted from the prevailing market dynamics through their diverse infrastructure solutions.

Conclusion

The Dell’Oro Group report illustrates the continued growth of the Data Center Physical Infrastructure market, primarily driven by AI-related demand. The insights provided point to current market trends and future expectations.