This paper presents the development of a novel integrated system that combines magnetocaloric cooling with thermomagnetic energy recovery for data center applications. The proposed technology leverages the magnetocaloric effect to provide efficient solid-state cooling while simultaneously recovering waste heat through thermomagnetic power generation. This dual-purpose approach addresses two critical challenges in modern data centers: reducing cooling energy consumption and converting low-grade waste heat into usable electricity. As data centers continue to consume increasing amounts of energy, particularly with the rapid growth of AI workloads, this integrated cooling and energy recovery system offers significant advantages over conventional cooling technologies. The implementation of magnetocaloric technology has the potential to reduce cooling energy demands by approximately 50% while recovering an estimated 20–30% of waste heat as electrical energy, moving data centers closer to a Power Usage Effectiveness (PUE) of 1.0. This paper outlines the underlying scientific principles, system architecture, development methodology, and expected performance metrics of a prototype demonstration system.