The Physical Layer Is Now as Strategic as the Chips
Data center electricity use is expected to roughly double by 2030, and grid connections and equipment lead times already limit how fast capacity is built. Buyers now ask how quickly new megawatts become usable compute. For power, cooling, and facility suppliers, that changes what you sell and who you sell it to.[1]
The physical market in numbers
Electricity roughly doubling
Data centers used about 485 TWh of electricity in 2025, and that is expected to reach about 945 TWh by 2030.[1]
$14 billion in one quarter
Manufacturers of data center power, cooling, and rack equipment took in $14 billion in the second quarter of 2026, up 27%, and the market is forecast to reach $120 billion by 2030.[2][3]
Liquid cooling more than doubling
Liquid cooling was close to $3 billion in 2025 and is forecast to approach $7 billion by 2029 as AI deployments accelerate.[4]
Lead times measured in years
In North America, medium-voltage switchgear can take about 80 weeks and transformers about 50. On-time delivery is now a reason to choose one supplier over another.[5]
Sell in the buyer's terms
Better cooling or more efficient power is not the pitch. Buyers judge how fast new megawatts become usable compute, and how much risk your equipment adds to that.
What cooling buyers judge
- The rack density it supports
- How much heat it removes, and the facility water it needs
- How it is serviced, and what happens when a part fails
- Whether it fits a retrofit or only a new build
- How fast it can be deployed
What power buyers judge
- Megawatts delivered, and how soon
- Conversion efficiency and footprint
- Lead time and delivery certainty
- Resilience and what it takes to maintain
- Fit with the next rack design
Who specifies your equipment
Much of the physical layer is chosen while the building is designed, long before anyone orders servers. Your route to market runs through more parties than the operator's IT team.
Facility design teams
Much of the power and cooling equipment is chosen while the building is designed, long before servers are ordered.
Developers and colocation providers
Companies that build and lease AI capacity decide equipment for many tenants at once.
Engineering and construction firms
The firms that design and build sites often write the equipment specification.
AI clouds
Newer operators building fast for AI can be earlier adopters than the largest clouds, and a reference for them.
More from this practice
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Where the trillion dollars goes, layer by layer, and which part of it your product can compete for.
Business development and sales leaders
Winning Hyperscaler Design-Ins
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Optics and interconnect companies
Photonics Go-to-Market
Where optics create enough system value to replace copper or pluggables, and who has to approve the change.
Memory and CXL companies
AI Memory Wall
Why large models run out of GPU memory, which suppliers that creates room for, and what to prove.
Frequently Asked Questions
Data centers used about 485 TWh of electricity in 2025, and that is expected to roughly double to about 945 TWh by 2030, according to IEA estimates.
Dell'Oro Group estimates liquid cooling was close to $3 billion in 2025 and forecasts it to approach $7 billion by 2029. The wider power, cooling, and rack equipment market is forecast to reach $120 billion by 2030.
Often not the server buyers. Facility design teams, developers, colocation providers, and engineering firms specify much of it while the building is designed, so a supplier needs a route to each of them as well as to the operator.
References
Figures checked against these sources on October 22, 2026.
- [1] How much energy do data centers and AI use? Our World in Data, citing IEA Key Questions on Energy and AI (2026). https://ourworldindata.org/how-much-energy-do-data-centers-and-artificial-intelligence-use
- [2] Data center physical infrastructure market grows 27 percent to $14 billion in 2Q 2026 (Dell'Oro Group, October 2026). https://www.delloro.com/news/data-center-physical-infrastructure-market-grows-27-percent-y-y-to-14-billion-in-2q-2026/
- [3] Data center physical infrastructure market forecast to reach $120 billion by 2030 (Dell'Oro Group, August 2026). https://www.delloro.com/news/data-center-physical-infrastructure-market-forecast-to-reach-120-billion-by-2030/
- [4] Data center liquid cooling market to approach $7 billion by 2029 as AI deployments accelerate (Dell'Oro Group, January 2026). https://www.delloro.com/news/data-center-liquid-cooling-market-to-approach-7-billion-by-2029-as-ai-deployments-accelerate/
- [5] The $7 trillion data center build-out: how industrials can capture their share (McKinsey, March 2026). https://karriere.mckinsey.de/industries/technology-media-and-telecommunications/our-insights/the-7-trillion-dollar-data-center-build-out-how-industrials-can-capture-their-share
Selling power or cooling into AI data centers?
Bring the product and the sites or operators you are targeting. We map who specifies it, what they judge, and how to get on the design.