The worldwide Data Center Physical Infrastructure (DCPI) market grew 28% year-over-year to $12 billion in manufacturer revenue during the first quarter of 2026, according to Dell’Oro Group. The quarter marked the fifth consecutive period of more than 20% growth as investment in AI computing infrastructure drove demand for power, cooling, and data center equipment. Dell’Oro also expanded its market coverage to include a broader Heat Rejection category, adding approximately $1 billion to the measured market.
Thermal Management led DCPI growth, expanding nearly 50% year-over-year as operators deployed Direct Liquid Cooling (DLC) systems to support higher-density AI infrastructure. Power distribution equipment associated with AI deployments also outpaced the broader market, with busbar revenue growing in the low-30% range and UPS revenue increasing at a high-teens rate. IT Racks and Containment and Rack PDUs recorded high-teens growth as higher rack densities and OCP-style in-rack DC power distribution changed infrastructure requirements.
Service providers reached a record share of DCPI manufacturer revenue, led by hyperscalers, neocloud providers, colocation operators, and data center developers. North America generated more than half of worldwide revenue. Dell’Oro raised its market outlook and expects DCPI revenue to maintain a low-20% year-over-year growth trajectory into early 2027, supported by record vendor order backlogs, while permitting delays, community opposition, evolving compute architectures, and schedule changes for giga-scale projects remain factors affecting deployment timing.
• Worldwide DCPI manufacturer revenue reached $12 billion in 1Q 2026, up 28% year-over-year.
• The market recorded its fifth consecutive quarter of more than 20% growth.
• Thermal Management revenue increased nearly 50%, making it the fastest-growing major DCPI segment.
• Direct Liquid Cooling continues to reshape cooling architectures for high-density AI computing infrastructure.
• Dell’Oro introduced expanded Heat Rejection coverage, adding approximately $1 billion to the measured DCPI market.
• Busbar revenue grew in the low-30% range as AI data centers adopted higher-capacity power distribution architectures.
• UPS revenue increased at a high-teens rate as higher-capacity and grid-interactive systems gained adoption.
• IT Racks and Containment and Rack PDUs each recorded high-teens growth.
• Service providers reached a record share of manufacturer revenue, driven by hyperscalers, neoclouds, colocators, and data center developers.
• North America accounted for more than half of worldwide DCPI revenue.
• Liquid cooling remained a focus of industry consolidation, including Ecolab’s agreement to acquire CoolIT Systems, Vertiv’s acquisitions of Strategic Thermal Labs, ThermoKey, and BMarko Structures, and Legrand’s investments in Kratos Industries and Accelsius.
“Demand for AI compute remains exceptionally strong, and access to power is still the defining challenge for the buildout,” said Alex Cordovil, Research Director at Dell’Oro Group. “Permitting delays and local opposition have grown into a watchout over the past few quarters—particularly in the United States, where community pushback is becoming a real factor in project timing, alongside unsettled compute architectures and giga-scale projects slipping their schedules. Against that backdrop, the vendors pairing industrial scale with deep data center exposure are the ones capturing the opportunity, with liquid cooling firmly at the center of it. We expect the market to hold a firmly positive trajectory, supported by record order backlogs.”
