London – October 19, 2026 -- The global data center cooling tower market will more than double from USD 1.12 billion in 2025 to USD 2.44 billion by 2035, an 8.06% CAGR, as water-use rules and 45 °C liquid cooling push AI campuses toward hybrid and dry designs, according to DC Market Insights.

Growth slows from 14.77% to 8.06% a year as water becomes the constraint

The market is estimated at USD 1.30 billion in 2026, up 15.65% on 2025. It grew 14.77% a year from 2020 to 2025, when new data center IT capacity doubled from 6,000 MW to 12,000 MW a year. NVIDIA puts water use of conventional evaporative designs at about 2.6 million gallons per MW a year, while racks accepting 45 °C coolant can run on dry coolers with no water.

DC Market Insights models the evaporative share of new AI capacity falling from 48% in 2025 to 30% in 2035. The evaporative share of all new capacity drops from 45.4% to 31.4%. Total new capacity rises from 12,000 MW to 27,000 MW a year, so evaporative-served capacity still grows 55%, from 5,448 MW to 8,467 MW annually.

Hybrid and adiabatic coolers grow 12.39% a year, lifting their share to 37.0%

Open-circuit towers led in 2025 with 45.0% of value (USD 505.90 million) but grow only 4.76% a year. They remain the largest segment in 2035 at 33.0%. Hybrid and adiabatic coolers rise from 25.0% to 37.0% of market value because they use water only on the hottest days.

The firm's cost model shows a hybrid or adiabatic cooler cuts water use by 75% to 90% versus an open tower for about USD 75,000 to USD 85,000 more equipment per MW. A dry cooler removes water entirely but costs about 2.6 times an open tower and needs the most fan power on hot days. Evaporative equipment costs about USD 95,000 per MW of IT load in a conventional hall and USD 140,000 per MW in an AI hall.

Service and rebuild revenue outpaces new equipment

Service and maintenance grows 10.36% a year and replacement and rebuilds grow 9.77%, both faster than new equipment, as towers from the 2015-2025 build-out reach mid-life. The evaporative-served installed base grows from 55,680 MW to 124,400 MW of IT load by 2035. Replacement reaches USD 537.41 million (22.0% of the market) and service USD 522.48 million, with contracts covering Legionella risk management under ASHRAE Standard 188 and water metering.

Maintenance contracts are worth USD 3,500 per MW a year in 2025, rising to USD 4,200 in 2035. Hybrid retrofits and service contracts together total about USD 1.06 billion in 2035.

Disclosure laws and dry-cooler orders threaten the base case

California AB 2469 and AB 2619 (signed 21 September 2026), Utah HB 76 (effective 6 May 2026) and EU Delegated Regulation 2024/1364 raise the political cost of open towers. An October 2026 order for more than 1,000 dry coolers providing 5 GW of AI heat rejection shows how much capacity can leave the segment. If the evaporative share of new AI capacity falls to 20% rather than 30%, the 2035 market reaches USD 2.03 billion instead of USD 2.44 billion.

Report author Amit Jain called the cooling tower decision "a water decision as much as a thermal one."

North America holds 44.0% of spend while India grows 14.82% a year

North America led in 2025 with USD 494.66 million. The United States alone accounted for USD 438.45 million, or 39.0% of global value. Latin America is the fastest-growing region at 11.99% a year, while Europe is slowest at 5.00% because cool climates and water reporting favour dry cooling.

India is the fastest-growing of the 12 largest countries, rising from USD 33.73 million to USD 134.30 million at 14.82% a year, as new capacity in hot coastal hubs makes evaporative rejection a grid-power saver. Malaysia grows 13.73% a year on Johor's campus pipeline.

Hyperscale and AI sites spent USD 539.63 million in 2025 (48.0%) and grow 10.50% a year. Enterprise and edge sites grow 0.83%. Suppliers are adding capacity: SPX Technologies raised its estimated annual data center revenue capacity to about USD 1.1 billion in July 2026, Baltimore Aircoil Company opened a plant near Monterrey, Mexico, in May 2026, and EVAPCO announced an Indian subsidiary in August 2026.