Digital Realty’s Liquid Cooling Strategy: How Partnerships are Powering the 2025 AI Data Center Boom
Industry Adoption: Digital Realty’s Strategic Pivot from Liquid Cooling Pilots to Global Scale
Between 2021 and 2024, Digital Realty executed a foundational strategy centered on piloting, standardizing, and preparing its global platform for the AI-driven surge in high-density computing. This period was characterized by validating the technology and building the business case. Key actions included a 2021 pilot with startup CoolestDC in Singapore, which demonstrated up to 29% server power savings, and a partnership with Lenovo that helped a financial client achieve a 30% energy efficiency gain. The inflection point was the move from bespoke projects to a standardized offering in August 2023, supporting up to 70 kW per rack with Air-Assisted Liquid Cooling (AALC). By mid-2024, the company had made Direct Liquid Cooling (DLC) available across at least 170 data centers, a direct response to a market where 50% of its new bookings were AI-related. This period was about establishing capability and proving its value through early customer wins like Preferred Networks in Japan and achieving critical certifications, such as NVIDIA DGX H100-ready status.
Beginning in 2025, the strategy visibly shifted from capability-building to accelerated global deployment and deep ecosystem cultivation. The focus evolved from having sites that were ‘liquid cooling-ready’ to actively scaling solutions, with over half of its 300+ global data centers now capable of supporting liquid cooling up to 150 kW per rack. The launch of the Digital Realty Innovation Lab (DRIL) in September 2025 marks a pivotal change, institutionalizing collaboration with tech leaders like NVIDIA, Lenovo, and Vertiv. This created a formal mechanism to de-risk AI adoption for enterprise clients and foster a feedback loop for innovation. The variety of commercial applications has broadened significantly, moving beyond pure colocation to enabling entire AI platforms, including NVIDIA’s AI Factory blueprint and the Dell AI Factory with DXC Technology. This shift confirms that liquid cooling is no longer a niche service but a foundational platform for the enterprise AI market, creating new opportunities for integrated solution sales and posing the new challenge of managing operational complexity at a global scale.
Table: Digital Realty’s Strategic Investments in High-Density Infrastructure (2022-2025)
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Atlanta Land Acquisition | October 2025 | Invested $120 million to acquire 100 acres of land to support over 200 MW of new data center capacity, specifically designed for hyperscale and AI clients with high-density cooling requirements. | Why is Digital Realty in the Top 10 Data Centre Companies? |
| Madrid Expansion | August 2025 | Announced a €500 million investment to build two new data centers in Madrid, expanding its infrastructure to meet growing demand for AI workloads that require advanced power and liquid cooling solutions. | DIGITAL REALTY STRENGTHENS ITS COMMITMENT TO … |
| NRT12 Development | March 2024 | Announced the development of NRT12 in Tokyo, a facility specifically designed for AI with power densities up to 70 kW per rack and utilizing innovative Air-Assisted Liquid Cooling (AALC) technology. | Digital Realty Lays Foundation to Private AI with Second … |
| Joint Venture with Blackstone | December 2023 | Formed a $7 billion joint venture to develop four hyperscale data center campuses in Frankfurt, Paris, and Northern Virginia, designed to meet the massive power and cooling needs of AI and cloud customers. | Digital Realty launches $7bn hyperscale data center JV … |
| River Cooling System | November 2023 | Invested €15 million ($16 million) in a river cooling system for its Marseille campus, reducing reliance on energy-intensive chillers and lowering the facility’s Power Usage Effectiveness (PUE). | Nature’s cool enough |
| Joint Venture with Realty Income | November 2023 | Formed a joint venture where Realty Income acquired an 80% equity interest for approx. $200 million to develop two data centers in Northern Virginia to support next-generation, high-density AI workloads. | Digital Realty and Realty Income Form Build-to-Suit Data … |
| Acquisition of Teraco | August 2022 | Completed acquisition of a majority interest in Teraco, Africa’s leading data center provider, in a transaction valuing Teraco at approx. $3.5 billion, creating a platform to deploy advanced cooling solutions in Africa. | Digital Realty, Ascenty investor, completes acquisition of … |
Table: Digital Realty’s Liquid Cooling Partnership Ecosystem (2021-2025)
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Schneider Electric | November 2025 | Signed a $373 million supply capacity agreement for power equipment in the US, securing the critical infrastructure needed to outfit facilities for high-power AI deployments that require advanced cooling. | Digital Realty signs $373m data center power kit deal with … |
| Vertiv | November 2025 | Selected Vertiv to supply next-generation cooling and power systems for its first data center in Rome (ROM1), designed to support high-density AI workloads with AI-powered cooling algorithms. | Why Digital Realty Picks Vertiv for Italy Data Centre Growth |
| NVIDIA | November 2025 | Expanded partnership in Manassas, VA, to support the NVIDIA Omniverse DSX blueprint and AI Factory, implementing advanced liquid cooling to handle high-density computational workloads. | Digital Realty Advances AI Infrastructure Innovation … |
| DXC Technology | October 2025 | Partnered to deploy the Dell AI Factory within Digital Realty’s data centers, providing an enterprise-grade AI platform leveraging infrastructure optimized for high-density power and cooling. | Digital Realty partners with DXC for enterprise AI platform |
| Lenovo, Vertiv, Motivair | September 2025 | Collaborated with technology leaders at the launch of the Digital Realty Innovation Lab (DRIL) to allow customers to test and validate high-density liquid cooling solutions in a real-world environment. | Digital Realty DRILs down into liquid cooling tech |
| Ecolab | September 2025 | Deployed an AI-driven water conservation solution across 35 US data centers, aiming to reduce water consumption in cooling systems by up to 15%. This marked the rollout of the successful 2024 pilot. | Data Centre futures: |
| Coolgradient | March 2025 | Integrated AI-powered software from Coolgradient to enhance energy efficiency and optimize cooling system performance in real-time, helping to reduce both energy and water usage. | How Digital Realty is Using AI to Build the World’s Most … |
| Preferred Networks (PFN) | November 2024 | Japanese AI leader PFN chose Digital Realty’s NRT12 data center in Tokyo to host its AI platform, citing the facility’s high-density power and expertise in direct liquid cooling as a key factor. | Preferred Networks Chooses Digital Realty’s Data Center … |
| Lenovo | November 2024 | Partnered to integrate Lenovo’s Neptune™ liquid cooling technology into its standardized high-density colocation offering, enabling faster deployment and greater energy efficiency for HPC and AI. | MEDIA ALERT: A New Era of Supercomputing Efficiency … |
| Mitsubishi Corporation | March 2024 | Formed a joint venture, MC Digital Realty, to develop AI-ready data centers in Japan, including facilities like NRT12 that feature advanced liquid cooling systems to support high-density workloads. | Digital Realty and Mitsubishi Corporation Form Data … |
| NVIDIA | July 2023 | Certified its KIX13 facility in Osaka, Japan, as NVIDIA DGX H100-ready, signifying its infrastructure is optimized for NVIDIA’s flagship AI systems, including support for liquid cooling. | Digital Realty Announces Its First NVIDIA DGX H100- … |
| G-Core Labs & Graphcore | June 2022 | Partnered to deploy a high-performance AI cloud in the AMS5 data center in Amsterdam, leveraging its infrastructure to support the high power and cooling needs of Graphcore’s AI processors. | Digital Realty, G-Core Labs partner on AI deployment |
| CoolestDC | November 2021 | Partnered with the Singaporean startup for a pilot at the SIN11 facility to deploy liquid-cooled servers, which demonstrated a power consumption reduction of up to 29% and led to a commercial service. | Digital Realty To Offer Liquid-cooled Racks in Singapore |
Geographic Footprint: Where Digital Realty is Deploying Liquid Cooling
Between 2021 and 2024, Digital Realty’s geographic strategy for liquid cooling focused on establishing beachheads in critical global technology hubs. Asia was a clear proving ground, with Japan and Singapore serving as key testbeds. Japan saw the development of the AI-ready NRT12 campus and the first NVIDIA DGX H100 certification in Osaka, while Singapore hosted the successful pilot with startup CoolestDC. In Europe, investments were targeted and innovative, including a DLC installation in Paris and a €15 million river cooling system in Marseille. North America, particularly Northern Virginia, was defined by strategic joint ventures with Blackstone and Realty Income, a capital-intensive approach to funding future high-density capacity. This period was about laying a geographically diverse foundation and validating concepts in specific, high-demand locales before committing to a broader rollout.
From 2025 onwards, the strategy has matured into broad-based capital deployment and ecosystem building within these established regions. Europe is now the site of massive, direct investment, highlighted by the €500 million commitment to Madrid and the launch of new, AI-native data centers in Amsterdam (AMS11) and Frankfurt (FRA18). The agreement with Vertiv to build out the ROM1 campus in Rome signals a confident expansion into new Tier 1 European metros. In North America, the focus has shifted from funding partnerships to direct action, with a $120 million land acquisition in Atlanta for over 200 MW of new capacity. This demonstrates that regions once used for pilots are now scaling rapidly, becoming mainstream markets for liquid cooling. The primary risk has shifted from technology validation to supply chain execution, underscored by the crucial $373 million power equipment deal with Schneider Electric for US operations.
Technology Maturity: Digital Realty’s Journey from Pilot to Global Scale
In the 2021–2024 timeframe, Digital Realty’s efforts were concentrated on moving liquid cooling from demo to a commercially viable pilot and, ultimately, a standardized product. The technology’s maturity was proven through targeted trials, most notably the 2021 pilot with CoolestDC in Singapore, which validated a 29% server power reduction and transitioned into a commercial offering. A significant milestone was the August 2023 launch of a standardized colocation product supporting up to 70 kW per rack using Air-Assisted Liquid Cooling (AALC). This transformed liquid cooling from a custom-engineered solution into a repeatable, scalable service. By mid-2024, Direct Liquid Cooling (DLC) was commercially available at over 170 sites, but the narrative remained focused on ‘readiness’ and ‘capability.’ The technology was commercially available but still being adopted by early-mover clients.
The period from 2025 to today marks the technology’s maturation to global commercial scale and deep ecosystem integration. The September 2025 launch of the Digital Realty Innovation Lab (DRIL) represents a major inflection point. It shifted the focus from internal validation to a collaborative, customer-led environment where clients can test and optimize solutions with established partners like Lenovo and Vertiv. This move signifies that the core technology is now stable, with the primary challenge shifting to integration and application-specific tuning. The technology is now scaling rapidly; over half of the company’s 300+ data centers support it, and new builds in Amsterdam (AMS11) and Frankfurt (FRA18) are designed with liquid cooling from the ground up. The definitive shift from ‘readiness’ to the active deployment of solutions supporting up to 150 kW per rack confirms that liquid cooling is a mainstream, mature technology within Digital Realty’s portfolio, attracting significant enterprise and investor interest.
Table: SWOT Analysis of Digital Realty’s Liquid Cooling Strategy (2021-2025)
| SWOT Category | 2021 – 2024 | 2025 – Today | What Changed / Validated |
|---|---|---|---|
| Strengths | Early mover advantage with successful pilots (CoolestDC) and standardization of a 70 kW AALC offering. Established a foundational footprint with 170+ DLC-ready sites. | Achieved massive global scale (over 50% of 300+ data centers) and cultivated a proven ecosystem through the Digital Realty Innovation Lab (DRIL) and partnerships with NVIDIA and Lenovo. | The strategy evolved from demonstrating potential and readiness to proving at-scale execution and deep ecosystem integration, validated by the launch of DRIL and support for NVIDIA’s AI Factory. |
| Weaknesses | Reliance on pilots and early-stage partnerships to prove technology viability. High CapEx requirements were often met through capital-intensive joint ventures (Blackstone, Realty Income). | Growing operational complexity of managing diverse cooling technologies globally. Heavy dependence on key suppliers like Schneider Electric and Vertiv for critical power and cooling components. | The primary risk shifted from technology validation to operational and supply chain scalability. This was validated by the large-scale, $373M supply agreement with Schneider Electric to secure capacity. |
| Opportunities | Capitalizing on early AI-driven demand, with 50% of new bookings being AI-related. Using sustainability as a key differentiator, highlighted by case studies showing 30% energy efficiency gains. | Positioned to capture the explosive growth of the data center liquid cooling market (23.31% projected CAGR). Deepening client relationships by de-risking AI deployment (DRIL, Dell AI Factory). Monetizing waste heat (SAMSON AG deal). | The opportunity grew from capturing early demand to dominating a high-growth market. The company validated new revenue streams beyond colocation, such as heat reuse and ecosystem services. |
| Threats | Market skepticism regarding the scalability and TCO of liquid cooling. The risk of competitive data center providers adopting similar technologies and eroding the first-mover advantage. | Potential for supply chain bottlenecks for critical components like switchgear and chillers. Rapidly evolving AI hardware from NVIDIA and others could outpace current cooling designs, requiring continuous R&D. | The threat shifted from market and technology risk to execution and supply chain risk in a hyper-competitive environment. The company is mitigating this through large supply agreements and the innovation pipeline of DRIL. |
2026 Outlook: What to Expect from Digital Realty’s Cooling Play
The data from 2025 signals a clear acceleration of capital deployment and ecosystem-driven growth for Digital Realty’s liquid cooling strategy. Looking ahead to 2026, we should expect more large-scale, direct investments like the €500 million commitment in Madrid and the $120 million land purchase in Atlanta, likely expanding into secondary but high-growth AI hubs across Europe and the United States.
The Digital Realty Innovation Lab (DRIL) will become the central nervous system of the company’s technology strategy. Watch for a steady stream of announcements detailing new partners joining the lab and, more importantly, new validated cooling architectures emerging from it. This is Digital Realty’s engine for staying ahead of the rapidly evolving hardware curve. The partnership with NVIDIA, in particular, has moved beyond simple certification to deep collaboration on blueprints for AI factories. Expect joint announcements on next-generation cooling solutions designed for future GPUs.
Finally, two key signals to monitor are sustainability-as-a-service and supply chain security. The 15-year heat reuse agreement with SAMSON AG in Frankfurt is a powerful precedent; expect Digital Realty to aggressively pursue similar long-term agreements that turn a cost center into a revenue stream. The most significant constraint on this growth is the supply chain. The $373 million deal with Schneider Electric highlights this dependency. Pay close attention to any future supply capacity agreements, as the company that best secures its supply of critical power and cooling components will be best positioned to win the AI data center race.
Frequently Asked Questions
What was the main difference in Digital Realty’s strategy between the 2021-2024 period and 2025 onwards?
Between 2021 and 2024, the strategy focused on proving the technology’s viability through pilots, such as with CoolestDC, and standardizing an initial offering (up to 70 kW per rack). Starting in 2025, the strategy shifted to accelerated global deployment and building a deep partner ecosystem, with over half of its 300+ data centers now supporting liquid cooling up to 150 kW per rack.
What is the Digital Realty Innovation Lab (DRIL) and what is its purpose?
Launched in September 2025, the Digital Realty Innovation Lab (DRIL) is a collaborative environment where customers can test and validate high-density liquid cooling solutions with technology leaders like NVIDIA, Lenovo, and Vertiv. Its purpose is to de-risk AI adoption for enterprises and create a feedback loop to drive future innovation in data center cooling.
Which key partners are helping Digital Realty implement its liquid cooling strategy?
Digital Realty has built a broad ecosystem of partners. Key technology partners include NVIDIA for AI platform collaboration, Lenovo for its Neptune™ liquid cooling technology, and Vertiv for next-generation cooling systems. To secure its supply chain, it has also signed major deals, such as a $373 million agreement with Schneider Electric for power equipment.
How is Digital Realty financing its high-density data center expansion?
Digital Realty has used a mix of direct investment and strategic partnerships. For example, it formed a $7 billion joint venture with Blackstone and another with Realty Income to fund hyperscale campuses. More recently, it has made direct investments, such as a €500 million commitment for new data centers in Madrid and a $120 million land acquisition in Atlanta.
What are the biggest challenges facing Digital Realty’s liquid cooling strategy now?
According to the analysis, the challenges have shifted from technology validation to execution at a global scale. The primary risks are now managing the operational complexity of diverse cooling technologies worldwide and potential supply chain bottlenecks for critical components like power equipment and chillers, which is why the company has made large supply agreements to mitigate this risk.
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