Data Center Boom: America’s Fastest Growing Regions for Data Centers

By Kristen Klepac

In today’s world, almost everything we do online—from streaming movies to posting on social media—relies on large data centers that store and process information. As our demand for digital services continues to grow, so does our need for these facilities. And though data centers rule our digital lives, they also consume a huge amount of power—about 1.5% of global electricity.

This demand for energy has led to a push for more sustainable energy solutions. Tech companies like Microsoft, Google, and Apple are investing in alternative energy sources such as solar, wind, and even nuclear power to run their data centers while attempting to minimize carbon emissions.

According to a recent report by cybersecurity company Upwind, supported by JLL, certain regions across the U.S. are set to experience massive growth in data center capacity. This growth is not only supporting the digital space but is also creating economic opportunities for locals. Let’s take a closer look at the five fastest-growing data center hubs in America.

The Data Center Surge: What’s Causing it?

Data centers house the servers, storage systems, and networking equipment that power the digital ecosystem. They support everything from cloud computing to streaming services, and the increase in digital content across the world has created an increased demand for these centers.

In the U.S., demand for data centers are expected to increase at a 23% compound annual growth rate through 2030. To meet this demand, certain regions are experiencing large growth in data center infrastructure, with energy demands increasing to support them. 

Why these regions? Beyond construction, many are rising to the occasion of identifying and developing alternative energy sources, putting them at the forefront of the data center boom.

Top 5 U.S. Data Center Hubs: Where Growth is Exploding

Upwind’s report reveals which U.S. regions are increasing their data center capacity at the fastest rate. Here are the top five:

1. Las Vegas/Reno

The Las Vegas/Reno region is experiencing one of the most explosive data center expansions in the country. With a projected growth of 953%, data centers in the area will require 3,812 MW of electricity by 2030—enough to power approximately 3.1 million homes.

This growth is driven by several factors, including Nevada’s affordable electricity rates (which are 35% lower than the national average) and the state’s renewable energy resources, such as geothermal, solar, and hydroelectric power. Google has already committed $400 million to a new data center in the region, just one example of the investments coming into the area. 

Las Vegas/Reno’s low cost alternative energy, combined with the region’s growing tech infrastructure, make it an ideal place for data center developers looking to reduce costs

2. Salt Lake City

Salt Lake City has an impressive forecasted growth rate of 699%. By the end of the decade, the region’s data centers will require 1,271 MW of electricity—an increase that will drive local economic growth and attract new investments.

Utah’s appeal as a data center hub lies in its low-cost real estate, favorable tax incentives, and expanding tech sector. Big tech companies like Meta and Google are already developing projects in the region, which will likely bring tech jobs to the area.

3. Phoenix

Phoenix will see a 553% increase in its data center capacity, which will eventually require 5,340 MW of energy—enough to power over 4 million homes. In recent years, Phoenix has overtaken Silicon Valley to become North America’s largest region for data centers.

One of the key reasons for Phoenix’s rise is its mix of alternative energy. Its natural gas and solar power lower electricity costs. This, plus lower land costs than California, makes it a prime data center destination. 

4. Atlanta

Although Atlanta is already a tech hub, the city has a forecasted 484% increase in data center capacity in the coming years. The city’s data centers are projected to require 3,125 MW by 2030—enough to power approximately 2.6 million homes.

Atlanta has seen large investments, such as Microsoft’s $1.8 billion project, which will build multiple data centers and double the size of Atlanta’s current data center capacity.

5. Dallas-Fort Worth

Dallas-Fort Worth (DFW) is another fast-growing data center hub, with a projected 355% increase in capacity. By 2030, the region’s data centers will require 4,396 MW of electricity, enough to power nearly 3.7 million homes. DFW’s rapid growth in the sector can be attributed to its cost-effective land prices and favorable business environment.

Land costs in Dallas are significantly lower than those in Silicon Valley and other major cities, making it an ideal place to buy and build. 

Northern Virginia: The Largest Boom Town

While these regions are growing, Northern Virginia continues to dominate the U.S. data center landscape. By 2030, the region’s data centers will require 11,077 MW of electricity—enough to power 9.1 million homes, more than three times the number of households in the entire state of Virginia.

Although Virginia is facing significant challenges in their growing energy demands, with the proximity to D.C. and its extensive fiber optic networks, Northern Virginia is and continues to be the leader in data center growth across the nation. 

The Economic and Environmental Impact

The rapid growth of data centers provides a significant boost to local economies. Each data center construction project generates approximately $243.5 million in local economic output and creates over 1,600 jobs during the construction phase alone. Once operational, data centers provide job opportunities and generate substantial tax revenue.

Additionally, the demand for sustainable energy sources is pushing tech companies to invest in alternative solutions. Google, Microsoft, and Amazon are all invested in renewable energy and carbon-neutral initiatives, with some looking towards nuclear energy as a power source for their data centers.

Data Centers and the Future of Energy

As the demand for data centers grows, these regions are quickly emerging as new digital data hubs. These expansive projects will not only fuel the digital economy but also drive investments in renewable energy and alternative energy technologies.

While the future of data centers has unlimited potential, the challenge of meeting their growing energy needs hasn’t been sufficiently answered. As these regions expand their digital infrastructure, they will play a large role in shaping both the economy and the energy landscape for years to come.