As the global demand for high-performance computing and data center capacity escalates, innovative cooling technologies are becoming essential to manage heat dissipation efficiently. Immersion cooling, a method where IT equipment is submerged in thermally conductive dielectric liquids, is rapidly gaining traction as a superior solution to traditional air cooling. By directly absorbing heat and eliminating the need for extensive air-conditioning infrastructure, immersion cooling offers significant energy savings, enhanced performance, and reduced environmental impact.

According to Straits Research, the global immersion cooling sector for data centers was valued at USD 426.56 million in 2024. It is projected to increase from USD 528.13 million in 2025 to a remarkable USD 2,915.98 million by 2033, growing at an impressive compound annual growth rate (CAGR) of 23.81% during the forecast period. This explosive growth is propelled by innovations in immersion system designs, expanding adoption by hyperscale and enterprise data centers, and strong environmental sustainability mandates.

How Immersion Cooling Works and Its Advantages

Immersion cooling involves submerging entire servers or electronic components in a sealed tank filled with a dielectric fluid which is non-conductive and thermally efficient. Unlike air, these liquids can absorb and transfer heat up to 1000 times more effectively, drastically reducing temperatures and operational stress on IT equipment.

Key system components include the immersion tanks housing submerged hardware, coolant distribution units (CDUs) that circulate fluid through heat exchangers, pumps regulating fluid flow, and filtration systems maintaining fluid purity. Systems can be single-phase, where the fluid remains liquid, or two-phase involving evaporation and condensation cycles maximizing heat removal efficiency.

Compared to conventional air-based cooling techniques relying on raised floors, CRAC (computer room air conditioners) units, and hot-cold aisle containment, immersion cooling achieves much lower power utilization effectiveness (PUE) ratios, sometimes approaching the theoretical limit of 1.0. This translates to energy savings up to 75-99%, operational cost reductions, and smaller physical footprints due to reduced cooling infrastructure.

Additional benefits include quieter operation due to lack of mechanical fans, longer hardware lifespan from reduced thermal cycling, and near elimination of dust contamination risk improving system reliability.

Leading Industry Players and Geographic Presence

Several key companies dominate the immersion cooling landscape with innovative products and expanding installation footprints:

• Submer (Spain): Pioneer in two-phase immersion cooling solutions, Submer’s modular tanks and fluid management platforms are deployed across data centers globally, focusing on scalability and sustainability.

• Vertiv (USA): Offers the CoolCenter Immersion system combining single-phase dielectric fluids with precision pumps and heat exchangers, targeting hyperscale data centers.

• GRC (Green Revolution Cooling) (USA): Specializes in single-phase mineral oil immersion cooling systems, achieving significant customer adoption in North American hyperscale cloud facilities.

• 3M (USA): Provides dielectric fluids optimized for immersion cooling with excellent thermal stability and environmental safety.

• Iceotope (UK): Designs enclosed, liquid-cooled servers aimed at combining immersion techniques with modular data center solutions.

• LiquidStack (Norway/USA): Develops sustainable immersion cooling solutions emphasizing bio-based dielectric fluids and thermal reuse for heating.

• Asahi Kasei (Japan): Developing fluorocarbon fluids optimized for two-phase immersion with high breakdown voltages suitable for telecommunications facilities.

• STULZ (Germany): Integrates immersion cooling components and controls into holistic data center cooling ecosystems.

• Alibaba Cloud (China): Deploys immersion cooling in its cloud data centers enhancing energy efficiency aligned with China’s carbon neutrality goals.

• Google (USA): Implements pilot immersion cooling projects pushing operational efficiency in various data centers.

Asia-Pacific, led by China, Japan, and South Korea, is rapidly embracing immersion cooling, motivated by accelerating data center deployments and environmental regulation. North America dominates with widespread hyperscale cloud operators while Europe drives adoption in sustainability-conscious financial and public sectors.

Emerging Trends and Growth Drivers

• Hyperscale Cloud Providers: Leading data center operators adopt immersion cooling to achieve sustainability targets while handling increased workloads from AI and streaming services.

• AI and HPC Workload Growth: High-power density servers demand efficient cooling beyond air capabilities, powering immersion adoption.

• Carbon Reduction Mandates: Stricter carbon commitments push data centers to adopt energy-saving technologies like immersion cooling.

• Dielectric Fluid Innovations: Development of biodegradable, non-toxic fluids supports green initiatives and reduces environmental impact.

• Waste Heat Recovery: Integration with heating systems recycles data center heat for district heating or industrial use.

• Modular and Containerized Cooling: Scalable immersion cooling modules enable rapid deployment suited for edge and hybrid data center models.

• Regulatory Incentives: Governments incentivize adoption of efficient cooling technologies via grants and tax credits.

• Integration with Monitoring and AI: Real-time thermal monitoring paired with AI-based predictive controls optimize cooling performance and preventive maintenance.

Recent Developments and Industry Updates

• Submer announced a major deal in mid-2025 supplying its two-phase immersion cooling tanks to a leading European cloud provider, projecting 40% power savings and significant carbon footprint reduction.

• Vertiv launched latest CoolCenter Immersion design incorporating intelligent flow modulation valves and predictive maintenance analytics, enhancing energy efficiency and operational reliability.

• GRC expanded contracts with major North American hyperscalers deploying single-phase immersion cooling to reduce PUE below 1.1 in ultra-high-density racks.

• 3M introduced new dielectric fluids with enhanced thermal stability and biodegradability, gaining traction among data centers targeting sustainability certifications.

• Alibaba Cloud ramped up immersion cooling adoption in Chinese data centers, combining bio-based fluids and thermal reuse to align with national “dual carbon” policies.

• Google initiated new pilots integrating AI-powered thermal control systems for immersive cooling environments achieving operational cost savings.

• LiquidStack partnered with Scandinavian power utilities to develop closed-loop heating applications reducing overall energy consumption.

• Iceotope released compact liquid-cooled server units enabling edge data centers in noise-sensitive and constrained spaces.

• STULZ integrated immersion cooling solutions with its holistic cooling infrastructure in German financial institutions to improve energy efficiency.

Summary

Immersion cooling is rapidly emerging as a game-changing technology in the data center cooling arena, offering extraordinary energy savings, enhanced hardware reliability, and sustainability benefits. Driven by innovations in dielectric fluids, AI-based thermal management, and growing cloud computing demands, immersion cooling solutions continue to gain adoption globally.