The worldwide Data Center Physical Infrastructure market grew 28 percent year-over-year to $12 billion in Q1 2026, drive

According to Dell'Oro Group, the DCPI market reached $12 billion in manufacturer revenue in the first quarter of 2026, marking the fifth consecutive quarter of growth exceeding 20 percent. The expansion reflects ongoing imbalances between relentless AI demand and limited compute availability. The quarterly total also incorporates newly expanded Heat Rejection coverage, which adds approximately $1 billion to the measured market and is expected to widen in future reports.

Alex Cordovil, Research Director at Dell'Oro Group, commented that demand for AI compute remains exceptionally strong and that access to power continues to be the defining challenge for buildout efforts. He noted that permitting delays and local opposition have intensified over recent quarters, particularly in the United States, where community pushback is becoming a significant factor in project timing. This pressure compounds challenges from unsettled compute architectures and delays in giga-scale projects. Cordovil emphasized that vendors combining industrial scale with deep data center expertise are best positioned to capture the opportunity, with liquid cooling now firmly central to solutions. The research director expects the market to maintain a firmly positive trajectory, supported by record order backlogs.

The Dell'Oro Group Data Center Physical Infrastructure quarterly report covers market sizes and forecasts across uninterruptible power supplies, thermal management, cabinet and rack power distribution, IT racks and containment, and software and services. It allocates manufacturing revenues by cloud service providers, telecommunications carriers, colocation facilities, and enterprise customers, while also providing insights into market trends, future outlook, and competitive positioning.