The latest report from Dell' Oro Group unveils a sustained momentum in the Data Center Physical Infrastructure (DCPI) market, showcasing an 18% year-on-year surge in manufacturer revenue, reaching $8.9 billion in the second quarter of 2025. This trend marks the third consecutive quarter of significant growth, underscoring the persistent demand fueled by the ongoing AI advancements.
Alex Cordovil, Research Director at Dell’Oro Group, said, "Hyperscalers and collocation providers are scaling capacity at a unprecedented pace, and direct liquid cooling has consolidated as the technology of choice, moving quickly from early adoption to mainstream design... With AI viewed as existential to competitiveness, we expect data centre infrastructure growth to remain exceptionally strong through 2026"
Key insights from the 2Q 2025 report include:
- Thermal Management: Shows a robust 29% year-over-year increase, with direct liquid cooling skyrocketing 156%, establishing itself as the prevailing standard for expansive AI clusters.
- Power Distribution: Experiences a 26% year-on-year rise, driven by swift adoption of overhead busways and intelligent rack PDUs catering to higher-density racks.
- UPS Revenue: Climbing 13% year-over-year to $3.3 billion, the demand remains robust for large three-phase systems rated at 251 kVA and above.
The North American sector leads with an impressive 23% year-over-year growth, underpinned by substantial gigawatt-scale campus announcements. Although regions like EMEA and Asia Pacific are slightly behind, they are positioned to accelerate in growth imminently.
Hyperscalers and colocation providers dominate over 80% of this expansion, underscoring their pivotal role in advancing the AI supercycle. This technological surge has significantly benefited vendors ranging from major infrastructure entities such as Vertiv to niche cooling specialists like Munters.
In summary, the robust growth trajectory in the data center infrastructure landscape, driven by AI advancements, depicts formidable prospects as the market trends reinforce a positive outlook through to 2026.
