Dell’Oro Group reports 18% growth in data center physical infrastructure

Dell’Oro Group reports Data Center Physical Infrastructure revenue rose 18% year‑over‑year in 3Q 2025, driven by hyperscaler Artificial Intelligence (AI) buildouts and conversion of multi‑year deployment plans, a detail relevant to data center capacity and architecture planning.

Market Overview

The worldwide Data Center Physical Infrastructure market grew 18 percent year‑over‑year in 3Q 2025 in manufacturer revenue. Momentum remained broad‑based and was supported by AI infrastructure buildouts and the steady conversion of multi‑year deployment plans into active projects.

Key Findings

Thermal management delivered strong growth, with Direct Liquid Cooling (DLC) expanding 85 percent year‑over‑year 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.

Segment or Supplier Performance

Industry consolidation accelerated, including acquisitions by Eaton (Boyd Thermal), Vertiv (PurgeRite), and Daikin (Chilldyne), reflecting vendor moves to expand thermal and power capabilities. Emerging competitors gained momentum, with Aaon scaling its data center thermal business by an order of magnitude within a few quarters and Modine securing notable hyperscale wins.

Technology or Trend Analysis

“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 report notes that the recent wave of Mergers and Acquisitions (M&A) has increased market activity and that DLC is consolidating while higher‑voltage and Dual Connectivity (DC) power designs are beginning to appear in next‑generation deployments.

Forecast or Analyst Outlook

The report expects DCPI revenue to sustain a high‑teens year‑over‑year growth trajectory through 4Q 2026 and cites architectural transitions including higher‑voltage distribution, emerging DC power topologies, and maturation of liquid‑cooling ecosystems.

Conclusion

The analyst summary highlights rising demand for data center power and cooling driven by hyperscaler AI buildouts, open standards activity, and supplier consolidation, information relevant for infrastructure planning. This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.