AI infrastructure keeps fueling another quarter of rapid growth across the data center supply chain. Dell’Oro Group says the global market for data center physical infrastructure (DCPI) expanded 28% year over year during the first quarter, marking a fifth consecutive quarter of growth above 20% as hyperscalers, neoclouds, and colocators continue investing aggressively to support AI deployments. Thermal management led all infrastructure segments, growing nearly 50%, while direct liquid cooling continues to reshape data center cooling architectures and power distribution technologies such as busbars also outpaced the broader market.

The report argues that AI demand remains constrained less by compute availability than by the industry’s ability to deliver power. Speaking with RCRTech, Dell’Oro research director Alex Cordovil said the primary bottleneck sits upstream of the white space, where transformers, medium-voltage switchgear and on-site generation face multi-year lead times that were never designed for today’s pace of AI infrastructure expansion. “Liquid cooling gets the attention, but you can stand up a cold plate loop far faster than you can energise a substation,” he said.

Cordovil also noted that while liquid cooling is transforming thermal architectures, another area deserves greater attention: heat rejection. Once heat is removed from AI chips, operators must still dissipate it efficiently through chillers, dry coolers, and related systems, making local factors such as water availability and climate increasingly important in facility design. Meanwhile, permitting delays and community opposition are emerging as additional risks in some markets, potentially pushing future AI capacity toward regions where power can be brought online more quickly.