Top Fastest-Growing Data Center Markets in the U.S.
Source: Upwind
As the digital economy continues to expand, the demand for data centers has skyrocketed. These hubs power everything from streaming services and cloud computing to AI applications and enterprise systems. In the United States, certain regions are emerging as key players in meeting this demand. According to commercial real estate firm JLL, demand is expected to increase at a 23% compound annual growth rate through 2030. Here’s a look at the five fastest-growing data center hubs in America.
In the United States, data center demand is projected to grow significantly, reaching 35 GW by 2030, compared to 17 GW in 2022, according to estimates by McKinsey & Company. Grid operators and utility providers are preparing for substantial load increases, driven by factors such as electrification, expanding manufacturing sectors, and the rapid development of data centers.
The Electric Power Research Institute (EPRI) reports that in 2023, 15 states accounted for 80% of the nation’s data center capacity. Leading the pack are Virginia, Texas, California, Illinois, Oregon, and Arizona. While this concentration presents substantial economic benefits for these states, it also raises concerns about the potential strain on energy grids.
Source: Upwind
1. Las Vegas and Reno
With a projected capacity growth of nearly 953%, data centers in Las Vegas and Reno are expected to require up to 3,812 MW of energy—enough to supply power to 3.1 million homes.
This growth is fueled by significant investments, including Google's $400 million facility in Nevada. A major contributor to the region’s appeal is its electricity costs, which are 35% below the national average. Nevada Energy, the state’s primary utility, powers most of its grid using renewable resources such as solar, geothermal, and hydroelectric energy, further enhancing its attractiveness for data centers.
2. Salt Lake City
Salt Lake City is on track to see a 699% increase in data center capacity, with potential future energy needs reaching 1,271 MW.
Utah’s business-friendly tax policies and cost-effective real estate have made it a hotspot for data center investments. Companies like Meta and Google have expanded operations here, capitalizing on the state’s tax incentives and low operating costs. This influx of investment has not only boosted the tech industry but also supported the region's overall economic growth.
3. Phoenix, Arizona
Phoenix is poised for a capacity expansion of 553%, translating to future energy requirements of 5,340 MW—enough to power 4.4 million homes.
Unlike neighboring California, which depends on costly and imported energy sources, Arizona leverages natural gas and solar power for more affordable energy production. These cost advantages have allowed Phoenix to surpass Silicon Valley as North America’s largest data center market, according to CBRE.
4. Atlanta, Georgia
Atlanta’s data center market is projected to grow by 484%, with future energy demand expected to reach 3,125 MW, sufficient to power 2.6 million homes.
Microsoft’s $1.8 billion investment is a key driver of this growth. The tech giant plans to construct three advanced data centers with a combined power capacity of 324 MW. This expansion will significantly increase the region’s data infrastructure, cementing Atlanta’s position as a major player in the global digital landscape.
5. Dallas-Fort Worth, Texas
The Dallas-Fort Worth area anticipates a 355% increase in data center capacity, with future energy requirements expected to hit 4,396 MW—enough to power 3.68 million homes.
DFW’s competitive land costs are a significant advantage, with property prices far lower than in other major tech hubs like Boston and Silicon Valley. This affordability, combined with the region’s strong business infrastructure, makes it a top choice for companies seeking efficient colocation solutions.
These five regions highlight the evolving landscape of data center growth in the U.S., driven by factors like energy affordability, renewable resources, tax incentives, and strategic investments. As the digital economy continues to expand, these hubs are poised to play a critical role in shaping the future of global connectivity.
Telkes Take: The rapid expansion of data centers presents an exciting opportunity for economic growth and innovation in the U.S. However, as demand surges to an expected 35 GW by 2030, the strain on energy grids cannot be ignored. At Telkes, we believe the solution lies in a balanced approach that prioritizes sustainable energy practices alongside grid modernization.
States like Virginia and Texas, leading the data center boom, must harness renewable energy solutions such as solar and wind to meet the growing power needs while reducing environmental impact. Collaborations between utilities, developers, and policymakers are essential to ensuring energy reliability without compromising sustainability.
As a partner to landowners and industrial innovators, Telkes is committed to enabling renewable energy projects that power the future responsibly. Together, we can ensure the digital age evolves in harmony with our planet.
Are you a landowner or an industrial roof owner? Join Telkes in leading the green energy revolution! Let us help you turn your property into a sustainable energy solution that benefits the planet. Visit Telkes today and discover how you can contribute to a cleaner future while maximizing your property's potential. Together, we can power a brighter, greener world!
