The Data Center Physical Infrastructure (DCPI) market continues to demonstrate remarkable growth in Q2 2025, largely propelled by the rapid expansion of artificial intelligence (AI) workloads. According to the latest Dell’Oro Group report, manufacturer revenue surged by 18% year-on-year, reaching $8.9 billion in the second quarter of 2025—marking the third consecutive quarter of double-digit growth.
Key Trends Shaping the Market
- Thermal Management:
The segment experienced a 29% year-on-year increase, with direct liquid cooling adoption soaring by 156%. This technology has quickly transitioned from early adoption to mainstream, becoming the standard for large-scale AI clusters. - Power Distribution:
Revenue in this category rose by 26%, fueled by the deployment of overhead busways and intelligent rack PDUs to support higher-density racks and greater power demands. - UPS Systems:
Demand for large three-phase UPS systems (251 kVA and above) remains strong, with revenue climbing 13% year-on-year to $3.3 billion.
Market Leaders and Regional Dynamics
North America leads the global market, reporting 23% year-on-year growth, driven by major gigawatt-scale data center campus announcements. While EMEA and Asia Pacific are growing at a slightly slower pace, both regions are expected to accelerate soon.
Hyperscalers and colocation providers account for over 80% of this expansion, solidifying their position at the forefront of the ongoing AI supercycle. The positive market momentum is also benefiting a broad range of suppliers, from major infrastructure companies to specialized cooling vendors.
Outlook
As AI becomes a critical driver of competitiveness, data center infrastructure investment is set to remain exceptionally strong through 2026. The continued adoption of advanced cooling, power, and management solutions highlights robust opportunities for both providers and end-users.
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