According to Cushman & Wakefield’s 2025 Global Data Center Market Comparison, while mature markets like Virginia, Beijing and London remain dominant, rising land costs and regulatory restrictions are enabling emerging regions and more rural markets to redefine the global data centre map.
Worldwide, larger site acquisitions for phased campus developments are becoming more popular. This is inevitably resulting in data centre projects to move more towards suburban and rural areas.
With insights from AT&T and McKinsey & Company, Capacity looks at how these markets are booming in the US and what’s next for the global data centre connectivity market.
How the US data centre market is booming
In the US specifically, markets like Charlotte, Northern Louisiana and Indiana are seeing significant investment, given tax incentives, available land and greater power accessibility. These markets will only continue to grow as they attract hyperscale and colocation providers alike.
Currently, rural areas across the country are facing significant challenges with internet connectivity, given difficulties accessing reliable and affordable broadband. According to the Federal Communications Commission, 22.3% of Americans in rural areas and 27.7% of Americans in Indian reservation land lack coverage from fixed terrestrial 25/3 Mbps broadband, compared to only 1.5% of Americans living in urban areas.
Such digital divides impact life across education, healthcare and economic opportunity. When it comes to the data centre industry, new buildouts are helping to facilitate greater connections.
“While established data centre hubs like Ashburn, VA; New York City, NY; and San Jose, CA remain key due to their extensive fibre infrastructure, high-density data centre campuses, strong connectivity and experienced local ecosystems, emerging capacity is rapidly growing in less-traditional markets across the Midwest, Southwest and Western US Cities such as Denver, CO; Memphis, TN; Salt Lake City, UT; Las Vegas, NV; the Ohio Valley and Albuquerque, NM,” shares John Golden, AVP product strategy & development business fibre products at AT&T.
“They are attracting significant investment thanks to their ample power availability and space, resources increasingly scarce in traditional metros.”
The US is also the largest and one of the fastest growing markets in the world in terms of gigawatt power consumption.
“Within the US, data centre capacity has been concentred in ‘Tier I data centre markets’ such as Northern Virginia, Northern California and Dallas,” explains Piotr Pikul, partner at McKinsey & Company.
“While these markets continue to be important and drive growth, we have seen a more secular growth in recent times with ‘new’ data centre markets emerging, owing to the constraints in Tier I markets. Now, there are data centres also in Louisiana, Wyoming, Utah and some of the other states and locations where data centres were never housed before.”
Enabling digital growth in rural areas
Regions like the US are successful at enabling growth, particularly as AI continues to boom and impact the data centre landscape. With hyperscalers eager to invest in and build facilities across the country, John Golden says more rural markets can “offer reliable, affordable power, ample land for data centres and favourable regulatory environments”.
He adds: “As power and real estate tighten in traditional hubs, they provide the scalability and cost efficiency needed for large-scale data centre operations. As power capacity is exhausted in major metros, demand is shifting to smaller metros and rural areas with greater power availability. This drives increased telecom and infrastructure investments in these regions.
“Expanding our network footprint in rural areas is key to supporting the connectivity boom, enabling growth in cloud services, AI and other data-intensive applications.”
McKinsey estimates that global demand for data centre capacity could more than triple by 2030, with demand growing by 20-25% per year in the US alone. States that can plan and manage data centre growth could unlock strong growth opportunities, create jobs and improve digital connectivity in the process.
“Besides pure demand, other drivers are the availability of power, local government incentives and connectivity are pushing demand to newer locations and these locations (in addition to the Tier I markets) are fuelling the connectivity boom.”
Driving the interconnectivity revolution
High speed connectivity is critical for a country’s economic development. Investing in infrastructure in rural areas can help to facilitate greater economic growth and improve life in remote areas.
“The data centre market is evolving with advanced technologies and sustainability efforts, including increased use of water cooling to handle higher workloads efficiently and reduce environmental impact,” Golden says. “Growth in edge computing and distributed infrastructure-driven by real-time applications like autonomous vehicles-requires inferencing closer to the edge, stimulating investment across all metros to ensure low-latency local access.
“Expanding networks rural investments position us at AT&T to support this scalable, resilient infrastructure needed for future global connectivity and innovation.”
The onus is on the data centre company to support the communities in which it operates. Pikul adds: “Instead of chasing shiny pennies to maximize short-term ROI, the most successful leaders are already thinking about where their company will fit in the data centre value chain and their role in increasing capacity.
“These leaders will act based on an industrial logic, contextualising where their companies sit within the ecosystem, clearly delineate valuable use cases for their customers and then stick to their plans to build the capacity required for those use cases.”
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