The demand for data centers is growing rapidly as businesses and individuals alike increasingly rely on cloud services, big data, and digital connectivity. However, not all locations are equal when it comes to housing these critical infrastructures. From access to renewable energy to tax incentives and connectivity, some states have emerged as top destinations for data center development. In this resource, we’ll explore the leading states driving this trend and what makes them the ultimate hubs for data centers.
Top States for Data Center Development
The top three states for data centers development in the U.S. are Virginia, Texas, and California. Hosting some of the most notable data centers in the country, these states have been leading the way in data center development due to various factors such as favorable business environment, availability of resources, and strong infrastructure.
Property owners in these states are especially well-positioned to take advantage of the data center boom and experience the benefits of leasing land for data centers. If you own land, consider leasing it for a data center by creating a free listing on LandGate's marketplace. With zero costs and no obligation to accept offers, LandGate's marketplace connects property owners with leading tech companies actively searching for data center locations. Showcase your property to a vast network and explore opportunities to monetize your land through data center leasing:
1) Data Center Development in Virginia
The state leading the country in data center development is Virginia. Virginia is often referred to as the "Data Center Alley" because it has the largest data center market in the world, hosting over 400 data centers, which is more than 35% of all hyperscale data centers in the world.
Approximately 70% of the world's internet traffic flows through Northern Virginia, cementing its position as a global hub for data infrastructure. The region also dominates data center leasing activity in the United States, boasting 1.6 gigawatts of transaction volume, including projected deliveries over the coming years. Northern Virginia hosts an impressive 51 million square feet of data center space, with just 167,000 square feet currently vacant and 13.4 million square feet actively under construction. Looking ahead, an additional 58.6 million square feet of data center development is planned, highlighting the region's pivotal role in the digital economy.
Governor Glenn Youngkin has focused on growing Virginia’s data center industry, highlighting the economic advantages driven by capital investments and increased local tax revenue. His administration has proposed the creation of a Mega Data Center Incentive Program, which includes extending associated tax credits on qualifying equipment and enabling software for an additional 15 years.
Notable Data Center in Virginia: Equinix DC2
Equinix DC2, located in Ashburn, Virginia, is one of the largest data centers in the United States. This cutting-edge facility connects businesses to a dynamic ecosystem of over 290 networks and 450 enterprises. Positioned strategically just seven miles from Dulles International Airport and 30 miles from Washington, D.C., it resides in one of the nation’s leading peering exchange markets. Spanning 147,600 square feet and powered by 5 MW of mission-critical energy, Equinix DC2 delivers unmatched reliability and performance, making it a cornerstone for businesses seeking seamless connectivity and robust infrastructure.
Equinix is steadily expanding its presence in Ashburn with the addition of a new fleet of four-story data centers, boosting the volume of racks and servers hosted in the buildings while further enhancing its growing network of facilities in the region. Equinix has become the first company to unveil plans for a groundbreaking four-story data center in Loudoun County, setting itself apart in a region where most developers typically opt for two-story designs.
Notable Data Center in Virginia: PW Digital Gateway
Late last year, the Prince William County Board of Supervisors approved the Prince William Digital Gateway, an ambitious 2,100-acre project poised to become the world’s largest data center campus. Covering 23 million square feet, this facility is expected to generate an impressive $500 million in annual local tax revenue once completed. The decision came after a marathon 27-hour public meeting, during which residents expressed both support and opposition to the development. Meanwhile, state lawmakers are pushing for increased oversight of local decisions regarding data center projects.
2) Data Center Development in Texas
Texas is the second top state for data center development in the U.S., with cities like Houston, San Antonio, and Dallas becoming major hubs. Driven by its favorable business environment, abundance of land, and reliable energy resources, Texas hosts nearly 300 data centers, with a range of colocation, hyperscale, and enterprise data center locations.
Notable Data Center in Texas: Element Critical Skybox Data Center
Nestled in Houston’s prestigious Energy Corridor, the Element Critical Skybox data center provides ultra-low latency connectivity to the I-10 fiber optic backbone, ensuring seamless access to the region's key business hubs. This state-of-the-art facility offers best-in-class colocation services and dedicated data halls, enabling rapid deployment of critical IT infrastructure. It features a high-density design that maximizes efficiency while reducing operational costs. Constructed to LEED Gold standards, the facility also boasts an FM I-150-rated concrete roof deck, engineered to withstand hurricane-grade winds up to 190 mph, ensuring unmatched resilience and reliability.
Shell has implemented GRC immersion cooling tanks at the Element Critical Skybox data center marking a major step by the energy giant into the world of advanced data center technologies. Partnering with Penguin Solutions, Shell has deployed several server clusters powered by AMD processors, all within GRC Immersion Cooling Systems. As part of its broader strategy, Shell—like many energy companies—has ventured into providing immersion cooling fluids to support high-density computing hardware. The company’s S3 X immersion cooling fluid, developed through its proprietary gas-to-liquids process, is derived from natural gas and designed to efficiently cool cutting-edge computing systems. This initiative highlights Shell's commitment to innovation in both energy and technology sectors.
Notable Data Center in Texas: CyrusOne DFW3 Data Center Campus
Situated on a sprawling 90-acre campus, the CyrusOne DFW3 data center campus stands as the largest data center campus in Texas, setting a new standard for performance and scalability. Strategically located in Allen, Texas, the facility spans an impressive 976,000 square feet, with 580,000 square feet dedicated to raised floor/white space upon full build-out. Designed from the ground up for maximum efficiency, the facility features cutting-edge cooling technology, exceptionally low PUEs, and robust multi-layered security.
3) Data Center Development in California
The third largest data center market in the U.S. is California, specifically the Silicon Valley and Los Angeles regions. With a concentration of tech giants and emerging startups, California is an ideal location for data center development. With over 80 providers across the state, California is home to over 400 data centers. The California data center market is projected to experience significant growth in the coming years as more enterprises transition their IT infrastructure to cloud-based solutions. From colocation facilities to hyperscale, enterprise, and cloud-focused projects, California’s data center development is anticipated to expand at an annual growth rate exceeding 7%.
Notable Data Center in California: Stockton1 Data Center
Commissioned by Nautilus Data Technologies, the 7MW Stockton1 data center is a pioneering achievement as the first floating data center. Moored at the Port of Stockton, California, this innovative facility is housed on a barge along the San Joaquin River and spans 10,000 square feet of operational space. Designed with a focus on sustainability and resilience, it is strategically located outside seismic zones and floodplains.
The carrier-neutral data center is seamlessly connected to an 18-mile, 288-strand redundant fiber ring, linking it to a nearby carrier hotel for robust connectivity. Nautilus highlights its advanced water-cooling technology, which supports high-density computing with over 100kW per rack, achieving an impressive PUE of 1.15. This groundbreaking approach redefines data storage with efficiency and environmental consciousness at its core.
Notable Data Center in California: Vantage Santa Clara 1 (CA1) Data Center Campus
The Vantage Santa Clara 1 (CA1) Data Center Campus stands as California's largest data center campus and a remarkable feat of engineering. Spanning a 21-acre campus in the heart of Silicon Valley, it features six multistory facilities with an impressive 77MW of critical IT load. As the largest LEED Platinum-certified data center campus in North America, it sets a benchmark for sustainability and innovation in the industry.
Located near one of the densest fiber connection points in the country, the Vantage C1 data center campus offers diverse fiber paths and multiple available carriers to provide robust connectivity. Additionally, there are three 50MW dedicated substations on-site, guaranteeing reliability and efficiency. The facility leverages gray water for environmentally friendly and sustainable cooling, complemented by an advanced chilled water loop system designed to maximize cooling efficiency while minimizing water usage.
Why is Virginia so Popular for Data Centers?
A combination of practical factors have made Virginia the perfect choice for expanding data center operations. Data centers in Virginia thrive thanks to robust fiber infrastructure and a highly favorable cost environment. The state offers a competitive tax rate, affordable and plentiful electricity- bolstered by a growing array of renewable energy options- and cost-effective construction.
Low Cost of Land: The initially low cost of Land in Northern Virginia made it an attractive region for data center development. But today, with the region becoming a prime location for data center development, acres are selling rapidly—often for $1 million or more.
Low Cost of Electricity: Ashburn offers electricity costs 20% below the national average, a key advantage as cooling servers is the biggest expense for data centers. With the growing demand for power, this cost efficiency is even more critical. Northern Virginia's strong economy and past development projects reduce the risk of major utility price hikes. The region provides affordable energy and local construction companies with nearly 30 years of specialized data center experience, making them some of the best in the industry.
Technically Skilled Workforce: Northern Virginia is home to a highly skilled technical workforce, bolstered by the strong presence of government technology contracting firms. This concentration of expertise has created a rich talent pool that continues to drive growth in the region. Data center operators are rapidly expanding their facilities, fueled by significant investments in constructing new centers and upgrading existing ones. These advancements play a critical role in supporting the growing demand for cloud services, positioning Northern Virginia as a key hub for technological innovation.
Stable Power: Northern Virginia’s appeal as a hub for data centers is strongly tied to its reliable power supply. Dominion Energy, the region’s primary utility provider, delivers approximately 1 Gigawatt of low-cost, dependable energy across Northern Virginia. This consistent power supply, combined with robust fiber infrastructure and strong government support, forms the backbone of the region’s thriving data center industry. Furthermore, with electricity rates 20% below the national average, Northern Virginia has established itself as an ideal location for developing cutting-edge technology and hosting infrastructure.
Government Support: The local government actively supports infrastructure development, recognizing the data center industry as a key driver of the modern economy with broad impacts across major sectors. Locally, it boosts employment and generates significant state tax revenue. Loudoun County has the highest median household income in the U.S., with Fairfax County close behind. The Virginia state government helped drive the development of Data Center Alley, approving the 2014 Data Center Zoning Ordinance to allow new data centers in more districts, provided they meet design guidelines. To maximize space, multi-story data facilities are encouraged. Loudoun County also launched the Fast-Track Commercial Incentive Program, which assigns a dedicated project manager, gives data center projects priority in reviews, and offers tax exemptions for qualifying facilities.
How Property Owners Can Contribute to Data Center Development
The growth of data centers is driving innovation, employment, and economic development across the country, and property owners have a unique opportunity to ontribute to this booming industry. By leasing land for data centers, property owners can play a vital role in supporting the expansion of the infrastructure that powers our digital world while monetizing their land. Property owners in Virginia, Texas, and California are especially well-positioned to take advantage of the data center boom and experience the benefits of leasing land for data centers.
If you own land and are interested in leasing it for a data center, create a free listing on LandGate's marketplace. With no costs or obligations to accept any offers, LandGate's marketplace allows property owners to display their property to a wide network of top tech companies actively seeking sites for data center development. Create a listing and start exploring offers to monetize your property through data center leasing today:
