How AI could push data centre infrastructure to $63.1 billion by 2029

AI buildouts are expected to propel the data centre physical infrastructure market to $63.1 billion by 2029, according to Dell’Oro Group.

According to the Data Center Physical Infrastructure 5-Year July 2025 Forecast Report, the data centre physical infrastructure (DCPI) market is projected to grow at a 15% CAGR from 2024 to 2019. This coincides with the knowledge that AI-ready capacity is accelerating throughout the decade. Dell’Oro Group reflects stronger-than-expected deployments to support accelerated computing workloads.

Likewise, the company expects liquid cooling will quintuple by 2029, as data centres look to more sustainable and efficient solutions.

AI is reshaping facility design from the rack up – densities are climbing, power is getting smarter, and liquid is moving from niche to necessary,” explains Alex Cordovil, Research Director at Dell’Oro Group.

“Our latest forecast shows the market scaling faster and more broadly than earlier expected, with vendors and operators adapting quickly to new thermal and electrical realities while navigating power constraints pragmatically.”

The report suggests that thermal management is projected to grow at a 19% CAGR by 2029. Within this, direct liquid cooling (DLC) is expected to surge from $1.1 billion in 2024 to $5.8 billion in 2029, as rack densities rise with accelerated computing.

Dell’Oro also suggests that DLC asserts itself as the dominant heat technology to dissipate heat out of the rack.

Likewise, findings reveal that Cabinet PDU & Busway will expand at a 21% CAGR. Overhead busbars are now the de facto choice for AI halls, Dell’Oro says, and are forecast to grow 25% CAGR. Likewise, service providers for cloud and colocation are expected to grow at a 20% CAGR until 2029, while enterprise will increase 6% CAGR – particularly as enterprise leaders favour colocation partners to host AI infrastructure.

Growth across the global market is surging, with North America continuing to lead and EMEA and the Chinese markets expected to peak around 2026. Dell’Oro suggests in its report that AI sovereignty and export-policy shifts will support such significant growth.

With operators increasingly combining utility ties with on-site generation, the report says it expects only a modest impact on capacity expansion from power constraints moving forward.

“The data centre landscape is evolving, from the growth of cloud and colocation data centre service providers to enterprise hybrid IT deployments, all augmented by the increasing trend of edge computing,” Cordovil adds. “Data centre physical infrastructure is not only adapting to this new data centre landscape but playing a critical role in enabling the next generation of compute deployments.

“This includes physical infrastructure to support increasing rack power densities, liquid thermal management solutions and remote monitoring and management services to support the next wave of sustainable data centres.”

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