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Alex Cordovil, research director at Dell’Oro, told RCR Wireless News that there has been a complete overhaul of data center design
The data center industry is experiencing one of the strongest expansion cycles in its history, with physical infrastructure revenue growing 17% year-on-year in Q1 2025, according to Dell’Oro Group.
Speaking with RCR Wireless News, Alex Cordovil, research director at Dell’Oro, described a market shaped by long-term digitalization trends and intensified by the global AI race.
Cordovil said the momentum that began years ago “is continuing and we don’t see that stopping anytime soon.” Consumers who once relied on cable TV, brick-and-mortar retail and in-branch banking have shifted decisively to streaming, e-commerce and mobile apps. “All these services we call, they might be in this ethereal cloud that we don’t often think what is supporting them, but in their core they’re being supported by data center critical infrastructure,” he said.
AI has magnified this demand. Since the launch of ChatGPT in 2022, the industry has seen “a very accelerated pace of this new AI super cycle,” Cordovil noted. The technology has risen to the top of corporate agendas, while AI labs push aggressively to train larger, more sophisticated models. “We’re seeing new models being developed that require more compute,” he said, adding that even if growth stabilizes, demand for inference and specialized models will continue driving infrastructure expansion.
This shift is also reshaping how data centers are engineered. For nearly two decades, operators followed well-established design conventions. Now those standards are being rewritten. Traditional high-density racks of 25–40 kW are giving way to systems approaching 200 kW and soon 600 kW. “A lot of designers, a lot of vendors, a lot of engineers had to go back to the drawing board,” Cordovil said. The result is “a complete overhaul of data center design.”
One of the most visible changes is the rise of liquid cooling. Dell’Oro reported that liquid cooling revenue more than doubled in Q1, although the technology is not poised to become ubiquitous. Early hesitation stemmed from its novelty. “There was just a lack of knowledge on how to design a liquid cooling loop… and again, new knowledge that most of the labor force has not been exposed to,” Cordovil explained.
Industry collaboration—from chip designers to OEMs and operators—has rapidly closed that gap. “I don’t see the adoption being held back anymore,” Cordovil said. Yet he emphasized that liquid cooling won’t become universal: data centers vary as widely as “a tiny little Vespa and a Formula One car.” Highly compute-intensive AI factories will require liquid cooling, while traditional enterprise workloads will continue relying on air-based systems.
The result is an industry in transition, driven simultaneously by enduring digitalization and a once-in-a-generation compute cycle. “It is a very good moment for the industry,” Cordovil said, “and we’re not expecting the optimism to go down anytime soon.”
