Italy’s data center expansion is driving a 30% rise in cooling demand. Utilities, engineering firms and HVAC leaders could gain from the AI-driven infrastructure boom.
Italy is rapidly emerging as one of Europe’s most dynamic data center markets. Its strategic location between Europe, Africa and Asia, combined with the surge in artificial intelligence workloads, is pushing infrastructure investment into a new phase.
Industry reports published in late 2025 and early 2026 indicate that demand for new data center capacity in Italy is expected to grow by roughly 30% year-on-year in 2025, with further expansion projected into 2026. Milan remains the primary hub, followed by Rome, but secondary locations in the South are gaining attention thanks to submarine cable connectivity and land availability.
According to the Osservatorio Data Center del Politecnico di Milano, investment in new facilities and IT equipment between 2026 and 2029 could reach €25 billion. Meanwhile, the Italian Data Center Association (IDA) has estimated more than €21 billion in planned investments over the next five years, alongside a projected 600% increase in installed capacity compared to 2024 levels.
Yet while hyperscale capacity and AI servers capture headlines, a less visible but equally strategic segment is attracting growing attention among institutional investors: cooling systems.
Modern AI-oriented data centers can allocate up to 35–40% of total energy consumption to thermal management. High-density GPU racks and advanced processors generate significantly more heat than traditional cloud workloads. Without next-generation cooling, the economics of AI infrastructure simply do not hold.
Read more: AI’s real bottleneck is infrastructure: power, space and cooling
As a result, the expansion of data center capacity automatically translates into structural demand for:
- Industrial HVAC systems
- Liquid cooling technologies
- Hybrid air-water systems
- Free cooling solutions
- Heat recovery infrastructure
Several infrastructure analysts estimate that Italy’s data center cooling market alone could exceed €1 billion in annual value by 2026 when combining new installations and retrofitting of legacy facilities. Importantly, cooling upgrades are not one-off expenditures: they typically involve long-term maintenance contracts and recurring service revenues.
For long-term investors, this shifts the narrative from speculative AI exposure to infrastructure cash-flow visibility.
Utilities, engineering firms and global HVAC leaders: who stands to gain?
There is no pure-play “Italian data center stock” on the market. However, several listed players could benefit indirectly from the structural expansion of digital infrastructure.
1. Utilities and energy providers
Data centers are highly energy-intensive assets, often requiring long-term power purchase agreements (PPAs), increasingly tied to renewable generation.
Companies such as Enel and A2A may benefit from rising electricity demand, particularly where they integrate renewable production with energy efficiency services. The growing emphasis on decarbonization and green PPAs could further strengthen their strategic positioning.
Moreover, as regulatory pressure intensifies across Europe, utilities capable of offering flexible grid solutions and on-site generation partnerships may capture higher-value contracts.
Read more: Not Just Nvidia: 5 AI Stocks Crash More Than 25%, but One Is Already Up Nearly 9%
2. Engineering and infrastructure contractors
Building hyperscale facilities requires complex design capabilities, especially for high-efficiency cooling and power redundancy systems.
Groups such as Maire (formerly Maire Tecnimont) and Webuild operate in advanced engineering and large-scale infrastructure. While data centers are not yet their core revenue segment, integrated infrastructure projects could increasingly include digital facilities.
The opportunity here is not limited to construction. Engineering firms that can deliver optimized thermal design, water management solutions and energy-efficient layouts may benefit from rising ESG-driven standards.
3. Global HVAC specialists
On the cooling front, leading international players are currently better positioned than domestic manufacturers.
Among them:
- Trane Technologies
- Carrier Global
- Daikin Industries
These companies are investing heavily in liquid cooling solutions tailored for AI data centers. Over recent fiscal years, several HVAC operators have reported data center segment revenue growth above 15% annually, often with margins superior to traditional commercial building applications.
Liquid cooling, in particular, is becoming central to next-generation AI clusters, where rack densities exceed 50–70 kW. Analysts suggest that the competitive advantage of data centers over the next five years may depend more on cooling efficiency than on real estate location.
Efficiency, regulation and talent: the real constraints to watch
While the growth trajectory appears strong, risks remain.
Energy availability is a primary concern. AI-driven expansion significantly increases electricity demand, requiring grid upgrades and accelerated renewable integration. Delays in grid connections and authorization procedures could slow project timelines.
Another structural bottleneck is talent. Industry surveys indicate shortages across engineering, operations and thermal design roles, with some estimates suggesting skill gaps affecting more than 90% of companies in the sector.
Additionally, European regulation is tightening. The Power Usage Effectiveness (PUE) metric — measuring overall energy efficiency — is becoming a competitive differentiator. Lowering PUE requires:
- Direct-to-chip liquid cooling
- Hybrid air-liquid systems
- Waste heat recovery for district heating networks
From an investor perspective, this suggests a medium- to long-term structural theme rather than a short-term speculative bubble.
Digitalization of industrial processes, sovereign cloud strategies and AI deployment across finance, manufacturing and public administration all point toward sustained infrastructure demand. The real question is not whether capacity will grow, but how efficiently it will be built.
The key takeaway is clear: the AI boom is not only about semiconductor stocks or Big Tech valuations. It is about the enabling infrastructure — energy, cooling, engineering — that makes computation possible.
Cooling may lack the glamour of AI chips, but it represents one of the most tangible, recurring and underestimated profit pools within Europe’s emerging digital backbone.
