Two-Phase Immersion Cooling Market By Cooling Fluid Type (Fluorocarbon-Based, Hydrocarbon-Based, New-Generation Blends); By Application (Data Centers, High-Performance Computing, Blockchain & Crypto Mining, Telecom & Edge); By End User (Hyperscale Cloud Providers, Colocation Operators, Enterprise IT, Research/HPC Institutes); By Geography, Segment Revenue Estimation, Forecast, 2024–2030

Introduction And Strategic Context

The Global Two-Phase Immersion Cooling Market is set to expand rapidly, valued at USD 1.3 billion in 2024 and projected to cross USD 5.8 billion by 2030 , reflecting a CAGR of 28.5% (2024–2030) . This growth trajectory is not just about cooling—it’s about rethinking the backbone of how digital infrastructure consumes and manages energy.

 

Two-phase immersion cooling (2PIC) refers to submerging IT hardware in a dielectric fluid that boils at low temperatures, dissipating heat efficiently before condensing and cycling back. Unlike air-based or single-phase liquid cooling, two-phase systems allow for extreme thermal efficiency, higher server density, and reduced reliance on mechanical chillers. In today’s context—where data centers , AI clusters, and blockchain farms are consuming more energy than some small nations—the market is attracting interest across the value chain.

 

Several macro forces converge here:

• Data Explosion from AI & Edge Workloads: The surge in AI model training, high-frequency trading, and 5G infrastructure is pushing conventional cooling to its limits. Two-phase immersion offers 40–50% better power usage effectiveness (PUE) than air cooling.

• Regulatory & ESG Pressure: Governments in Europe, North America, and parts of Asia are tightening carbon-reduction mandates. Operators are being nudged to adopt “green” cooling technologies that slash water and electricity consumption.

• Hardware Innovation: Next-gen GPUs, TPUs, and ASICs produce heat densities above 1,000 W per chip. Traditional cooling hits a ceiling at these levels, while immersion cooling enables reliable, overclocked performance.

• Cost Dynamics: While upfront system costs remain high, the operational savings—lower energy bills, extended hardware lifespan, and smaller real estate footprints—are drawing serious interest from hyperscale operators and colocation providers.

 

The stakeholder ecosystem here is broad: OEMs (building tanks and fluid delivery systems), semiconductor and server manufacturers (optimizing hardware for immersion), cloud providers (hyperscale adoption), colocation operators, and green investors funding sustainable infrastructure. Even governments are stakeholders—Japan, Singapore, and the Nordics have pilot programs subsidizing immersion-based data centers as part of digital sustainability strategies.

 

To be honest, immersion cooling isn’t just an efficiency play anymore—it’s becoming a strategic lever. Data center operators are realizing that cooling will define who scales AI fastest, who meets sustainability targets first, and who manages cost under volatile energy pricing. That’s why this market, once niche, is suddenly at the center of boardroom discussions.

 

Market Segmentation And Forecast Scope

The two-phase immersion cooling market cuts across multiple layers of infrastructure, each reflecting how data centers balance performance, cost, and sustainability. Here’s how the segmentation typically unfolds:

By Cooling Fluid Type

• Fluorocarbon-based Fluids
  Still the most common choice due to dielectric reliability, stable boiling points, and compatibility with a wide range of hardware. However, these fluids are expensive and face scrutiny over environmental impact.

• Hydrocarbon-based Fluids
  Gaining traction as cost-effective and lower-GWP (global warming potential) alternatives. They require tighter safety protocols but are drawing attention in Asia and Europe.

• New-Generation Fluids (Engineered Blends, Low-GWP Refrigerants)
  Emerging as the fastest-growing category, particularly as regulations tighten. In 2024, they account for roughly 22% of market share , but their adoption is projected to double by 2030 as sustainability standards evolve.

 

By Application

• Data Centers (Hyperscale & Colocation)
  The largest segment, driven by AI clusters, financial trading systems, and cloud workloads. In 2024, this group represents nearly 61% of the market .

• High-Performance Computing (HPC) & Research Labs
  National labs, universities, and defense agencies are deploying immersion tanks to support simulations, quantum experiments, and genome mapping.

• Blockchain & Cryptocurrency Mining
  Still volatile but a strong niche. Mining rigs benefit from higher efficiency and longer hardware life, particularly in regions with cheap power.

• Telecom & Edge Infrastructure
  Small but growing segment. Edge sites, especially for 5G and IoT, are adopting immersion systems to operate in space-constrained, remote environments.

 

By End User

• Hyperscale Cloud Providers
  Amazon, Google, and Microsoft are piloting immersion deployments to cut megawatt-scale energy bills.

• Colocation Operators
  Positioned as early adopters since immersion can differentiate service offerings while optimizing floor space.

• Enterprises (Banking, Media, Gaming, Healthcare)
  Starting to test immersion for private clouds, though adoption remains slower due to capital intensity.

 

By Region

• North America – Mature adoption in hyperscale facilities, especially in the U.S., where AI training clusters are pushing cooling thresholds.

• Europe – Strong regulatory push toward sustainable cooling; the EU Green Deal is accelerating pilots in Germany, the Netherlands, and Scandinavia.

• Asia Pacific – The fastest-growing market, fueled by data center expansion in China, India, Singapore, and South Korea. Governments here are investing in digital infrastructure sustainability.

• Latin America & Middle East & Africa (LAMEA) – Early-stage adoption, but cryptocurrency and sovereign AI projects are sparking localized demand.

 

Scope Note: While the segmentation looks technical, it’s also commercial. Vendors now position their systems not just as “cooling tanks” but as integrated platforms —bundling fluid, racks, monitoring software, and service contracts. This shift indicates that two-phase immersion cooling is evolving from a niche engineering solution into a scalable, packaged product for global IT infrastructure.

 

Market Trends And Innovation Landscape

The two-phase immersion cooling market is at a point where innovation is running ahead of adoption. What was once experimental—used in defense labs or crypto farms—is now finding its way into hyperscale data centers and enterprise pilots. Several trends stand out:

Shift Toward Next-Gen Fluids

Traditional fluorocarbon-based fluids have long dominated, but their high cost and environmental footprint are opening the door for alternatives. Chemical players are introducing low-GWP engineered blends that balance dielectric performance with sustainability mandates. One CTO at a European data center noted, “If your fluid vendor can’t provide a lifecycle carbon footprint, it won’t make our shortlist.”

 

AI-Optimized Cooling Systems

AI workloads—especially large language models—produce heat densities that air or water cooling can’t handle. Vendors are now offering immersion systems with real-time AI-driven thermal management , where software dynamically adjusts tank pressure, fluid levels, and condensation cycles. This enables consistent chip performance and extends hardware life, especially in GPU-intensive clusters.

 

Compact Edge Deployments

Immersion isn’t only about hyperscale. Telecom operators are testing modular immersion tanks for edge sites —stackable units that can sit in metro hubs or even rugged environments. These tanks reduce the need for bulky chillers and allow edge data centers to operate closer to consumers with minimal downtime.

 

Integration With Renewable Energy Grids

Cooling is no longer just an operational cost—it’s being linked to energy optimization strategies . Some Nordic and Asian facilities are coupling immersion tanks with renewable-powered campuses. In certain cases, waste heat from immersion setups is redirected to nearby district heating systems—turning cooling into a revenue stream.

 

Standardization & Ecosystem Collaboration

One hurdle has been the lack of interoperability standards. But now, alliances are forming. The Open Compute Project (OCP) has released immersion cooling guidelines, and hyperscale operators are working with fluid suppliers, tank builders, and OEMs to align designs. This signals a shift from proprietary builds toward a more standardized ecosystem.

 

Crypto to Cloud Transition

Two-phase immersion first gained notoriety in cryptocurrency mining because of its ability to extend ASIC lifespans. But the market is now tilting heavily toward cloud and AI operators . Miners still matter, but hyperscalers bring scale, capital, and influence—shaping the innovation roadmap toward enterprise-grade reliability and compliance .

Bottom line: The innovation curve is steep, but the adoption curve is catching up. Two-phase immersion cooling is moving from “experimental” to “essential,” especially in workloads where performance, sustainability, and efficiency collide.

 

Competitive Intelligence And Benchmarking

The two-phase immersion cooling market is still young, but the competitive field is already sharpening. Unlike air cooling, where large HVAC players dominate, immersion cooling has attracted specialist startups , chemical giants, and select hardware OEMs . What differentiates the winners isn’t just technology—it’s the ability to build ecosystems that combine tanks, fluids, monitoring systems, and support.

Submer

Based in Spain, Submer has positioned itself as one of the most visible pioneers. The company offers modular immersion tanks tailored for hyperscale and edge deployments . Its strategy revolves around partnerships with chipmakers and data center operators to ensure fluid compatibility and rack-ready designs. Submer emphasizes sustainability, often marketing systems that integrate into renewable-powered campuses.

 

GRC (Green Revolution Cooling)

U.S.-based GRC has deep experience with immersion systems, initially gaining traction in military and HPC use cases . Its rack-scale deployments are now popular with colocation operators who want turnkey immersion solutions. GRC has leaned heavily into customer support—designing systems that can retrofit into existing facilities instead of demanding all-new infrastructure.

 

LiquidStack

LiquidStack , a spinoff from Bitcoin mining operations, is now making inroads with cloud providers . The company focuses on two-phase immersion tanks with extreme density support , claiming some of the industry’s highest heat removal capacities. Their appeal lies in cost reduction for operators running GPU-heavy AI clusters .

 

3M (Chemicals Division)

Although 3M announced plans to exit certain fluorochemical lines, it remains influential as a fluid supplier . For years, its Novec fluids were industry standards. While some competitors are filling that gap, 3M’s role illustrates how chemical innovation and supply chains shape market dynamics just as much as tank design.

 

Allied Control ( Bitfury Group)

A key player in early adoption, Allied Control originally built immersion cooling for cryptocurrency mining farms . Now, it’s repositioning toward data center operators, offering prefabricated immersion modules that can scale quickly in new facilities.

 

Intel

As a hardware giant, Intel isn’t selling tanks but is deeply invested in immersion-ready chip design and validation . It collaborates with tank vendors to ensure CPUs and GPUs maintain reliability in fluid environments . This alignment between hardware and cooling technology is vital for mainstream adoption.

 

Other Emerging Startups

Several smaller firms—mainly in Asia—are experimenting with cost-effective hydrocarbon fluids and localized tank manufacturing . While not yet global players, they’re significant in markets like China and India, where cost sensitivity drives adoption.

 

Competitive Dynamics at a Glance:

• Submer and GRC dominate early pilots with colocation and HPC operators.

• LiquidStack is winning attention in AI/crypto crossover markets.

• 3M and chemical firms remain critical in shaping fluid innovation.

• Intel and server OEMs influence standards and ensure long-term reliability.

To be honest, this market isn’t about who sells the biggest tank. It’s about who can convince data center operators that immersion cooling is safe, scalable, and compliant. That means ecosystem collaboration is often more valuable than standalone products.

 

Regional Landscape And Adoption Outlook

Adoption of two-phase immersion cooling is uneven across regions, shaped by energy costs, climate, regulatory priorities, and digital infrastructure maturity. Some regions are treating immersion cooling as a strategic lever for sustainable digital growth , while others remain in pilot stages.

North America

North America is currently the largest adopter , especially in the U.S. Hyperscale players like Google, Microsoft, and Amazon are actively testing immersion for AI training clusters where power density exceeds what air cooling can manage. Several colocation providers are following suit, positioning immersion as a premium service for clients needing HPC or GPU-heavy workloads.

Drivers here include:

• Energy efficiency mandates in states like California and New York.

• The rising cost of power and water for cooling in urban hubs.

• Military and research projects funded by the Department of Energy and DARPA, which rely on immersion for HPC simulations.

Canada is also emerging as a test bed , leveraging cooler climates and renewable energy grids to host sustainable immersion-based facilities.

 

Europe

Europe takes a regulation-first approach . With the EU Green Deal and strict carbon-reduction targets, immersion cooling is viewed as a compliance tool as much as a cost-saver. Northern Europe (Sweden, Finland, Denmark) is leading, thanks to abundant renewable energy and district heating networks that can reuse waste heat from immersion tanks.

Germany and the Netherlands are seeing fast adoption in colocation centers , while the UK is pushing immersion pilots in financial services and government computing hubs. However, fluid regulations are tighter here, accelerating the shift away from traditional fluorocarbon-based solutions toward low-GWP alternatives .

 

Asia Pacific

Asia Pacific is the fastest-growing region , fueled by the sheer scale of data center build-outs.

• China : Domestic cloud players like Alibaba and Tencent are testing immersion cooling to support AI services and video-streaming workloads. The government’s “green data center ” policy framework is also pushing adoption.

• India : Colocation providers in Mumbai, Hyderabad, and Bangalore are piloting immersion cooling for edge and enterprise deployments, driven by high urban density and unreliable power grids.

• Japan and South Korea : Heavy investments in 5G and AI infrastructure are creating demand for immersion-based systems that can operate reliably at smaller urban edge sites.

• Singapore : A key hub where immersion cooling is viewed as critical, since land scarcity and government-imposed moratoriums on new traditional data centers demand higher efficiency per square meter .

 

Latin America, Middle East & Africa (LAMEA)

This region is in early stages , but specific drivers are emerging:

• Latin America : Brazil and Mexico are piloting immersion cooling in cryptocurrency farms and urban data centers , where energy efficiency is becoming critical due to high cooling costs.

• Middle East : The UAE and Saudi Arabia are funding mega-projects like NEOM that include sustainable data infrastructure, with immersion cooling earmarked as a showcase technology.

• Africa : Adoption is minimal, but startups are exploring small-scale immersion solutions for telecom edge nodes , particularly in regions with limited water resources.

 

Regional Dynamics in Perspective:

• North America remains the scale leader, where hyperscalers are driving the narrative.

• Europe is the regulatory driver, shaping sustainability standards and influencing fluid choices.

• Asia Pacific is the growth hotspot, where sheer demand for new capacity is pulling immersion into the mainstream.

• LAMEA is the frontier—untapped but promising, particularly where energy scarcity or sustainability goals are top of mind.

The takeaway: regional adoption isn’t just about technology readiness—it’s about aligning with local policy, power economics, and sustainability priorities. In many cases, those factors matter more than the tanks themselves.

 

End-User Dynamics And Use Case

In the two-phase immersion cooling market , end users aren’t just evaluating thermal performance—they’re weighing long-term economics, sustainability, and operational complexity. Each user group comes with distinct adoption patterns:

Hyperscale Cloud Providers

The most influential end users, hyperscalers like Google, Microsoft, and AWS , are exploring immersion cooling to tackle AI-driven workloads . Their scale makes them uniquely positioned to justify the upfront investment. They prioritize:

• Ultra-dense racks for GPU and TPU clusters.

• Lower total cost of ownership through reduced energy bills.

• Meeting ESG commitments , where immersion is marketed as a sustainability differentiator.

For them, immersion is less about experimentation and more about future-proofing massive compute campuses .

 

Colocation Operators

Colos adopt immersion cooling selectively to differentiate services . With enterprise clients increasingly asking about green credentials, colos are installing immersion tanks as premium offerings . Their focus:

• Flexible modular deployments.

• Marketing immersion as a “green IT” add-on.

• Serving high-value clients in finance, gaming, and AI who demand reliability.

The challenge for colos is balancing capex-heavy upgrades with thin margins. Many rely on vendor partnerships to share costs and expertise.

 

High-Performance Computing (HPC) & Research Institutions

National labs, universities, and defense agencies have long been early adopters. They rely on immersion for workloads like climate simulations, nuclear research, and genome mapping —all of which push compute infrastructure to its limits. Here, immersion isn’t optional—it’s mission-critical . These users often co-develop solutions with vendors, shaping innovation roadmaps.

 

Enterprise IT (Banking, Media, Healthcare, Gaming)

Enterprise adoption is still slow. Most companies lack the budget or technical expertise to deploy immersion systems at scale. Early pilots exist in financial trading, animation studios, and biotech research , but adoption is limited to niche, high-density clusters . Vendors are beginning to offer as-a-service immersion cooling models to attract this segment.

 

Blockchain & Crypto Miners

Although volatile, miners remain a vocal segment. Two-phase immersion extends ASIC lifespans, cuts noise, and improves hash rate efficiency. Still, due to fluctuating Bitcoin prices and regulatory uncertainty, immersion cooling in crypto remains boom-and-bust driven .

 

Use Case Highlight

A colocation data center in Frankfurt faced rising electricity costs and client pressure for greener operations. The operator piloted a two-phase immersion cooling pod serving financial services customers running GPU-heavy risk models.

Results within 12 months:

• Power usage effectiveness (PUE) dropped from 1.58 to 1.12 , saving over USD 2 million annually in energy costs.

• Hardware lifespan improved, reducing replacement cycles.

• The operator began marketing itself as a “carbon-resilient colo ,” attracting new enterprise clients who otherwise considered cloud providers.

The lesson: immersion cooling is more than an engineering upgrade—it’s a revenue and brand strategy, particularly for colocation players competing against hyperscale giants.

 

Recent Developments + Opportunities & Restraints

Recent Developments (Last 2 Years)

• Submer partnered with Intel (2023) to validate immersion-ready chip architectures and standardize testing for hyperscale deployments.

• GRC launched ICEraQ Series X (2024) , a next-gen two-phase immersion system designed for AI training clusters, supporting higher rack densities.

• LiquidStack opened a new manufacturing plant in the Netherlands (2023) to scale production for European data centers under sustainability mandates.

• 3M announced its exit from PFAS-based immersion fluids (2023) , accelerating the market shift toward low-GWP engineered alternatives.

• Alibaba Cloud initiated large-scale immersion cooling pilots (2024) across multiple Chinese data centers , citing AI workload efficiency.

 

Opportunities

• AI & HPC Workloads: Exploding demand for GPU and TPU clusters makes immersion cooling essential for performance stability and efficiency.

• Sustainability Mandates: Regulatory pushes in Europe and Asia Pacific are turning immersion from a “nice-to-have” into a compliance tool.

• Emerging Market Adoption: India, Brazil, and Middle Eastern hubs are investing in green data centers , creating new growth corridors for vendors.

 

Restraints

• High Upfront Cost: Tanks, fluids, and retrofitting existing data centers remain capital intensive, limiting smaller operators.

• Standardization Gaps: Lack of universal standards for fluid handling, fire safety, and hardware compatibility slows adoption.

• Perception Risk: Some enterprises remain wary of submerging expensive servers in fluids, leading to longer adoption cycles.

 

7.1. Report Coverage Table

Report Attribute	Details
Forecast Period	2024 – 2030
Market Size Value in 2024	USD 1.3 Billion
Revenue Forecast in 2030	USD 5.8 Billion
Overall Growth Rate	CAGR of 28.5% (2024 – 2030)
Base Year for Estimation	2024
Historical Data	2019 – 2023
Unit	USD Million, CAGR (2024 – 2030)
Segmentation	By Cooling Fluid Type, By Application, By End User, By Geography
By Cooling Fluid Type	Fluorocarbon-based Fluids, Hydrocarbon-based Fluids, New-Generation Blends
By Application	Data Centers, High-Performance Computing (HPC), Blockchain/Crypto, Telecom & Edge
By End User	Hyperscale Cloud Providers, Colocation Operators, Enterprise IT, Research/HPC Institutes
By Region	North America, Europe, Asia-Pacific, Latin America, Middle East & Africa
Country Scope	U.S., Canada, Germany, UK, Netherlands, China, India, Japan, Singapore, Brazil, UAE, etc.
Market Drivers	- Rising demand from AI and HPC workloads - Regulatory pressure for sustainable cooling - Energy efficiency and operational cost savings
Customization Option	Available upon request