Japanese air-conditioning giant Daikin Industries is making a bold push into the booming data center sector with the acquisition of U.S.-based Dynamic Data, a startup specialising in artificial intelligence-driven cooling systems.
The move, announced Wednesday, marks Daikin’s latest step in diversifying beyond traditional residential and commercial climate control, as the demand for energy-efficient cooling solutions in the digital economy surges.
The global data center cooling market is projected to reach $42.4 billion by 2032 — more than 2.5 times its estimated size in 2024 — according to Indian research firm Fortune Business Insights. That growth is being fuelled by the rapid expansion of cloud computing, AI workloads, and high-performance computing, all of which generate significant heat and require advanced thermal management.
For decades, Daikin has been known primarily as a leader in home and office air conditioning. But as digital infrastructure becomes one of the world’s fastest-growing industries, the company is shifting focus toward large-scale, industrial-grade cooling systems that can support data-intensive operations.
Dynamic Data’s technology uses AI algorithms to optimise cooling efficiency in real time, reducing energy consumption and operational costs. This capability is critical for hyperscale data centers, where electricity bills can account for nearly half of operating expenses.
“Cooling is no longer just about temperature — it’s about intelligence,” said Masanori Togawa, president and CEO of Daikin. “Dynamic Data’s expertise allows us to bring AI-driven efficiency to data centers worldwide, aligning with our commitment to sustainability and innovation.”
Data centers are among the fastest-growing consumers of electricity globally, with the International Energy Agency warning that their power use could double by 2026. Traditional cooling methods, which often involve overcooling to prevent outages, are becoming unsustainable.
Dynamic Data’s AI platform collects and analyses temperature, humidity, and workload data in real time, adjusting cooling systems dynamically to ensure optimal performance with minimal waste. The company claims its technology can cut cooling-related energy use by up to 30%.
“Partnering with Daikin allows us to scale our solution globally,” said Michael Greene, CEO of Dynamic Data. “Their manufacturing capacity, global service network, and industry expertise will help us deliver smarter, greener cooling to the world’s most demanding digital facilities.”
The acquisition comes as competition intensifies among major players in the data center infrastructure market. With AI training models and cloud services requiring ever-greater computing power, operators are seeking advanced cooling solutions that can handle both performance demands and environmental pressures.
By integrating Dynamic Data’s AI systems with its existing product lines, Daikin aims to offer turnkey cooling solutions — from hardware to intelligent control — tailored for hyperscale, colocation, and edge data centers.
