Emerging Markets for Data Center Development in 2025

As the digital world expands, so does the need for scalable, sustainable, and strategically located data centers. While established hubs remain vital, 2025 is shaping up to be a transformative year for emerging data center markets. 

These rising hotspots offer unique advantages—from cost-effective land and power to favorable tax policies and renewable energy access—making them key targets for data center development.

Contents

Key Drivers Shaping the 2025 Data Center Landscape

Primary Markets

Emerging Markets (2025)

Key Drivers Shaping the US Data Center Landscape in 2025

• AI Workloads:  The rise of AI data centers is fueling demand for high-density, power-hungry infrastructure.
• Power Availability: Reliable, affordable energy is the most critical site selection factor— pushing development into new regions with better capacity and renewables.
• Land Acquisition & Cost: Limited land and soaring prices in primary markets are prompting a shift toward more affordable, expansive areas.
• Tax Incentives: States offering streamlined permitting and business-friendly policies are attracting attention for data center investment.
• Connectivity: Fiber optic infrastructure and proximity to network hubs remain crucial, though expansion is also spurring fiber development in emerging areas.
• Sustainability Goals: Operators are prioritizing markets with renewable energy and climates that support energy-efficient cooling—a priority for the future of US data centers. 

Established Primary Markets

Primary hubs are still vital but are expanding outward as urban cores hit capacity and face power bottlenecks.

• Northern Virginia: Still the global leader, “Data Center Valley” is shifting toward nearby cities as it faces power shortages, spurring expansion and innovative energy solutions like nuclear.
• Dallas-Fort Worth, TX: Leading the U.S. in leasing activity in early 2025, strong demand and affordable power position this as a national frontrunner.
• Phoenix, AZ: Lower costs, tax incentives, strong infrastructure, and rising solar energy are fueling significant land acquisitions and hyperscale data center development.
• Silicon Valley, CA: Remains crucial due to its tech ecosystem, despite high land costs and grid challenges.
• Chicago, IL: A central U.S. powerhouse known for robust fiber connectivity.

Emerging U.S. Data Center Hotspots & Markets for 2025

The search for power, land, and favorable economics is fueling rapid growth in several emerging U.S. hotspots:

Las Vegas, Nevada

Significantly lower operational expenses, including 35% lower electricity costs, and proximity to California with low latency make this location advantageous for data centers. Recent hyperscale investments, such as Google, underscore its projected 1,000% capacity increase.

Salt Lake City, Utah

A 700% projected growth rate, bolstered by low disaster risk, tech industry momentum, tax incentives, and renewable energy access makes it an attractive emerging hub.

Columbus, Ohio

Ohio is becoming a major data center hub due to its central location, reliable power, skilled workforce, and favorable policies. Hyperscalers like Amazon Web Services (AWS) are starting to expand in areas such as New Albany.

Rural Virginia (Beyond Ashburn)

Counties such as Prince Edward, Mecklenburg, Pittsylvania, and Halifax are attracting development due to direct proximity to Ashburn's fiber backbone but with significantly lower land and utility costs, aggressive local tax incentives, and access to renewable energy developments. Microsoft's Boydton campus is a key example.

The Dakotas

North and South Dakota are emerging due to wind energy leadership, cold climates ideal for cooling, and expanding rural broadband. AI-focused firms are investing in modular deployments (e.g. Applied Digital’s Ellendale facility). 

Rural Texas 

Beyond the major metros, rural regions benefit from the Electric Reliability Council of Texas (ERCOT)’s grid, renewable dominance, and vast land availability. Meta and Lancium are already investing.

Final Thoughts

As demand for data capacity surges and primary markets hit logistical limits, the spotlight is shifting to previously overlooked regions. From the renewable-rich landscapes of the Dakotas to the expansive grid capacity of rural Texas, emerging markets are redefining the U.S. data center map. 

For developers, investors, and suppliers, the message is clear: the future lies in flexibility, sustainability, and untapped potential. See what others miss. Act before they can. Contact our sales team today to learn more about Acres Data Center Index.