The worldwide Data Center Physical Infrastructure (DCPI) market sustained its momentum in 2Q 2025, growing 18 percent year-over-year to $8.9 billion in manufacturer revenue, according to a new report from Dell’Oro Group. This marks the third consecutive quarter of high-teens growth, underscoring the durable demand created by the ongoing AI buildout.
“Hyperscalers and colocation providers are scaling capacity at an unprecedented pace, and direct liquid cooling has consolidated as the technology of choice, moving quickly from early adoption to mainstream design,” said Alex Cordovil, Research Director at Dell’Oro Group. “This is creating a structural uplift across power and cooling architectures that will shape the data center landscape for years to come. With AI viewed as existential to competitiveness, we expect data center infrastructure growth to remain exceptionally strong through 2026.”
Additional highlights from the 2Q 2025 Data Center Physical Infrastructure Quarterly Report:
- Thermal Management expanded 29 percent Y/Y, with Direct Liquid Cooling surging 156 percent Y/Y as it emerges as the de facto standard for large AI clusters.
- Power distribution markets grew 26 percent Y/Y, driven by the rapid adoption of overhead busways and intelligent rack PDUs to support higher-density racks.
- UPS revenue rose 13 percent Y/Y to $3.3 billion, with demand strongest in large three-phase systems of 251 kVA and above.
- North America led with 23 percent Y/Y growth as record-breaking gigawatt-scale campus announcements accelerated, while EMEA and Asia Pacific trailed but are expected to pick up momentum.
- Hyperscalers and colocation providers accounted for more than 80 percent of expansion, underscoring their central role in fueling the AI supercycle.
- Vendors across the spectrum benefitted from the AI surge, from large infrastructure powerhouses like Vertiv to specialized cooling players such as Munters.
