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Data Center Geography: More Than Tax Incentives and Facility Numbers
There’s more to understanding data center buildouts than counting facilities, according to a just-released report from the Institute of International Finance (IIF).
In researching data from the Pacific Northwest National Laboratory’s IM3 Open Source Data Center Atlas, the authors said that the largest concentration of data centers is in major population centers, including Virginia’s Data Center Alley and Silicon Valley.
The difference is in the capacity.
Centers in densely populated regions tend to be smaller than those in other parts of the country, with the larger hyperscaler campuses found in less-populated areas including the Pacific Northwest, the Southwest, the Southeast and the Midwest.
These also tend to be areas with more power and land, though the authors cautioned that the correlation doesn’t explain whether power availability attracts the centers or generating capacity expands in response to new demand.
Meanwhile, tax incentives alone don’t drive buildouts. “The evidence suggests that tax treatment is one element of the location decision, alongside power availability, infrastructure, land costs and proximity to demand, although further research is needed,” the report’s authors said.
Photo: Data center exterior and construction: TomUK/Shutterstock
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