DIGITAL INSIGHTS: Virginia May Be Data Center Capital ...
... but the industry is exploding in several hubs across the country.
By Martin Davis
EDITOR-IN-CHIEF
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Digital Insights is a new weekly feature appearing on Thursdays that explores the role of data centers in our region. These columns will focus on four areas: tracking the development of data centers in our area, exploring projected and actual tax revenue trends, explaining what data centers are and how they affect our daily lives, and reporting on research and emerging trends in the industry. These columns are made possible, in part, by a grant from Stack Infrastructure.
Virginia is often referred to as the Data Center Capital, but it’s far from the only place in the country that data centers are being constructed.
The data center map currently counts 4,055 data centers in the United States, 638 of those in Virginia. Exact numbers, however, are hard to nail down, which some experts pinning the total number operating in the United States north of 5,000.
Data centers tend to grow in clusters. Virginia has proven attractive to data center builders for a number of reasons. Historically, stable energy supplies, a surplus of talent, a strong fiber-optic backbone that reduces latency (the delay in time it takes to transmit data), and the state’s proximity to four major transoceanic fiber connections cables which land in Virginia Beach have attracted the industry.
Virginia is also a good location for hyperscale data centers. Though there is no one set definition for hyperscale, they are generally considered to be data centers that are owned by one company, like Amazon or Google, and are associated with mission-critical tasks.
Here are some other places that data center growth is booming.
Texas
The Lone Star Stat has seen a significant boost in data center growth over the past several years. Between 2023 and 2024, Central Texas, particularly around Austin and San Antonio, witnessed a four-fold increase in data center construction, according to Texas A&M University.
The boom in construction, according to the Texas Tribune, is owed to “the state’s relatively cheap energy prices, the ease with which facilities can connect to the grid and its overall business-friendly tax and regulatory environment,” according to the Tribune. It also has an abundance of land, and it produces a substantial amount of renewable energy.
The state is home to the first Stargate program data center, announced by President Trump soon after his inauguration. The site sits near Abilene, Texas.
Hyperscale data centers are also prominent in Texas, along with so-called colocation data centers. These are centers that rent space to multiple clients.
The growth shows no signs of abating, with forecasters suggesting that energy demand created by data centers will double by 2030.
Georgia
Virginia may be the Data Center Capital, but Georgia is possibly the fastest growing market.
According to a June 2025 by McGuire Woods, “Georgia has overtaken Northern Virginia as the country’s most active data center market.” It notes that Atlanta “recorded 705.8 megawatts (MW) of net absorption, nearly 39 times its 2023 total.”
Beyond this, the construction pipeline in Georgia “now exceeds 2,150 MW, making it the largest among all primary data center markets.”
Like Texas, Georgia offers a strong fiber network and a tax structure that appeals to the industry.
Amazon Web Services has announced an $11 billion expansion in Georgia.
Illinois
The area known as Chicagoland, which includes the city of Chicago proper and the sprawling suburbs to its north, south, and west, has emerged as a data center hotspot. Other midwestern cities like Kansas City and the state of Indiana are also attracting interest.
Chicago has become a hotspot for colocation data centers, and its attractiveness is due to several factors. Located in the center of the country, Chicago’s fiber network means low latency for connections to nearby major markets like New York, Philadelphia, and Atlanta.
Temperatures in the Midwest, on average, are also cooler than in the southeastern and southwestern united states, which helps with cooling costs.
Finally, Illinois has created a robust series of tax incentives to bring the industry to the heartland.
Arizona
The state has not only enjoyed a population boom this century, it’s also become a major player in the data center industry. It is currently ranked fourth in the country in data center capacity.
Like the other regions mentioned, hyperscale and colocation data centers are popular in Arizona. But the state is also attracting so-called edge data centers. These are data centers located close to the end-user.
A Shared Concern
In all of these areas, electricity demands are the shared concern. In Arizona, for example, electricity providers are projecting they’ll need to triple their output. Texas and Virginia are similarly facing the challenge of meeting growing energy demands.
Next week, Digital Insights will take a closer look at these growing energy demands in Virginia, and how local operators like Rappahannock Electric Cooperative are inventing ways to handle future loads.
The state has become attractive to makers of
Data centers, like ice cream, come in a variety of flavors.
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