Data Center Physical Infrastructure Market Forecast to Reach $120 Billion by 2030, According to Dell'Oro Group
Nearly 200 GW of Data Center Capacity to Be Added Through 2030 as Thermal Management Leads Growth
REDWOOD CITY, Calif., Aug. 19, 2026 /PRNewswire/ -- According to a recently published report from Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, worldwide Data Center Physical Infrastructure (DCPI) manufacturer revenue is projected to grow at a 22 percent compound annual growth rate (CAGR) from 2025 to 2030, reaching $120 billion by the end of the period. This growth is driven by net additions to installed IT capacity, which account for the large majority of the forecast. Additionally, the infrastructure content per megawatt will have a smaller effect as higher-density and liquid-cooled architectures redistribute spend across DCPI categories.
"The AI buildout has moved past the point where it can be treated as a surge. It is now the baseline against which the rest of the market is measured," said Alex Cordovil, Research Director at Dell'Oro Group. "What has changed in this forecast is where the risk sits. Demand is no longer the open question—delivery is. Equipment lead times, construction labor, grid interconnection, and community consent all remain constrained, especially with the first statewide data center moratorium now in force."
Additional highlights from the Data Center Physical Infrastructure 5-Year July 2026 forecast report:
- Capacity Additions Peak in 2026: Annual net capacity additions peak in year-over-year growth terms in 2026 and moderate steadily thereafter, remaining in double-digit growth territory through 2030. The market is still expanding quickly, but no longer accelerating. North America leads capacity additions over the period, followed by China.
- Thermal Management Leads Segment Growth: Thermal Management remains the fastest-growing DCPI segment, with liquid cooling the fastest-growing technology as rack densification moves the technology from an option to a precondition. Heat rejection coverage has been expanded in this edition, with water-cooled chillers expected to grow faster than air-cooled units on scalability rather than efficiency. Chillers remain a staple of data center specifications, even in warm-water designs, since free cooling loses effectiveness during the hottest days of the year.
- UPS Growth Concentrates in Larger Systems: Growth within the UPS segment concentrates in higher power rating three-phase systems, which are expected to expand faster than smaller units as the larger building blocks of AI clusters push deployments up the capacity curve. Medium-voltage designs are gaining ground, connecting UPS systems closer to the grid and attracting new entrants alongside established suppliers. Solid-state transformers are projected to weigh meaningfully on UPS demand beginning in 2029, initially focusing on large AI factories that have largely moved away from UPS-based architectures.
- Hyperscalers and Colocation Anchor Demand: Hyperscalers end the period as the largest single contributor to DCPI revenue, although their growth has slowed compared to the pace seen in 2025–26, as they lean more heavily on colocation partners to serve workloads, particularly outside the United States. Colocation remains central to the buildout, and the spread of powered shell development is shifting equipment procurement onto the tenant, moving revenue among customer segments without altering building occupancy. Newly separated in this forecast, AI-specialized Cloud—the neoclouds and AI model builders—becomes one of the fastest-growing lines in our coverage. Enterprise demand continues to grow, but more slowly than the rest of the market.
- Regional Diversification Builds: North America continues to lead regional growth, with China the next largest contributor. EMEA is the only region revised downward from the January forecast, reflecting slower power availability and a more difficult permitting environment. Community opposition has become a material constraint on siting, blocking or delaying a meaningful share of announced projects. Together with the expected repricing of U.S. natural gas, are expected to support faster growth in CALA and Asia Pacific excluding China.
Dell'Oro Group's Data Center Physical Infrastructure 5-Year Forecast report provides a complete overview of the Data Center Physical Infrastructure market. This covers market sizes and forecasts for uninterruptible power supplies (UPS), thermal management, cabinet power distribution and busway, rack power distribution, IT racks and containment, and software and services. Allocation of manufacturer revenues by hyperscaler, other cloud, colocation, telco, and enterprise customer segments is also provided, alongside a forecast of data center capacity additions by region. For more information about the report, please contact us at [email protected].
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit www.delloro.com.
SOURCE Dell'Oro Group
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