Dell’Oro Group reports 27% growth in data center physical infrastructure
3 companies named across 7 categories, one of 28 articles referencing Vertiv. Previous coverage: Data Center Physical Infrastructure Market Expands 28 Percent Y/Y in 1Q 2026, According to Dell’Oro Group (Jul 2026).
Companies mentioned
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- Platform / Infrastructure Operations Leader
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- Data Center / Data Center Infrastructure / Data Center Physical Infrastructure / Power Equipment & Management
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Dell’Oro Group reports worldwide data center physical infrastructure manufacturer revenue reached $14 billion in 2Q 2026, up 27 percent year over year. Permitting, power, and equipment timelines are stretching AI data center projects, the firm says.
Market Overview
Dell’Oro Group said worldwide data center physical infrastructure revenue grew 27 percent year over year to $14 billion in 2Q 2026, extending a run of growth above 20 percent. Demand for AI data center capacity continued to outpace supply, the report says. The modest slowdown from 1Q 2026 reflects a tougher comparison rather than softer demand, the firm said.
Permitting and Siting as a Near-Term Constraint
Alex Cordovil, research director at Dell’Oro Group, said, “The quarter’s loudest debate was whether the AI data center buildout is being cancelled; the quieter and more consequential one is whether it will be permitted.” Cordovil said hyperscaler spending plans leave little doubt about demand, while power, long-lead equipment, and community opposition are stretching project timelines.
Cordovil said, “We now regard siting and permitting as the most serious near-term brake on the market, and the timing of permits and grid interconnections is harder to call than the demand behind them.”
Technology and Segment Performance
Thermal management grew more than 40 percent year over year, the highest rate among segments, and matched its record share of data center physical infrastructure revenue. Liquid cooling, led by direct liquid cooling, and heat rejection both outpaced the segment, according to the report.
UPS revenue grew about 20 percent year over year, with gains concentrated in large three-phase systems. Vendors are moving toward medium-voltage designs and preparing for 800 VDC power architectures. Busway remained the preferred overhead power train for AI clusters, with supply as the binding constraint.
Customer Segments and Regions
Under the new five-segment customer structure, colocation was the largest customer segment, followed by hyperscalers. Other cloud, which includes neoclouds and AI model builders, grew at the highest rate, with AI-specialized cloud revenue roughly doubling year over year. Enterprise continued to lose share.
North America remained the market’s center of gravity. EMEA accelerated to its fastest growth since 2021, on European colocation and sovereign AI projects.
Supplier Activity and Policy Developments
Ecolab closed its acquisition of liquid cooling specialist CoolIT Systems in July. Vertiv agreed to acquire behind-the-meter power and microgrid provider UtilityInnovation Group, and SLB agreed to acquire heat-exchanger maker Kelvion.
Since the quarter closed, New York imposed the first statewide data center moratorium in July, and Pennsylvania removed data centers from its fast-track permitting program in August. Texas ordered an audit of data center projects in the ERCOT interconnection queue, delaying the first batch of large-load studies.
The report indicates demand for AI data center capacity continues to exceed supply, while permitting, power, and equipment timelines are emerging as the main near-term constraint. For Decision Insights readers, the findings bear on data center project timelines. This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.
Blog post, originally published at delloro.com.