The artificial intelligence (AI) boom is driving states to compete for the data centers on which AI systems rely – and the large investments, infrastructure advances, and economic growth they bring. In a new insight, Director of Energy and Environmental Policy Shuting Pomerleau and Lily-Ann Smith discuss the key factors developers consider when determining new data center locations.

Key points:

• As states compete to appeal to data center developers, it is helpful for them to understand the key factors in determining location for data centers, which include power availability, utility partnership, fiber optics cable availability, proximity to customers, regulatory landscape, and various environmental conditions.
• The top U.S. data center markets are Phoenix, Chicago, Dallas, Portland and Eastern Oregon, and Silicon Valley, with the Commonwealth of Virginia leading by a wide margin in existing, pending, and upcoming capacity.
• Where developers decide to situate data centers is based on a calculation much more complex than land and construction costs and instead considers factors including energy access, network speed, and market proximity.

Read the analysis.