Data centers are moving inland, away from some traditional locations

Two completely separate reports indicate data center construction is moving toward the center of the country and away from the coasts. The first report comes courtesy of Synergy Research Group, which found the center of gravity for planning and building data centers is shifting away from some of the traditional coastal locations and moving inland, with the availability and cost of power being a major driving factor. John Dinsdale, chief analyst Synergy, admits this doesn’t mean much for the end user. “This is about the shape and structure of the underlying infrastructure. It is important for lots of people, for lots of reasons; but not so much for end users,” he said via email. Texas is the main beneficiary, but several Midwestern states are also seeing a big influx of investments. Texas is the most prominent state in the pipeline. In the Midwest, Wisconsin, Indiana, Michigan and Missouri will all grow rapidly in importance, as they have attracted multiple major projects from Amazon, Google, Meta, Microsoft, OpenAI and CoreWeave. However, data center growth is going to be tempered this year as many of the proposed or planned projects will not come online when scheduled, if at all. Research from market intelligence company Sightline Climate noted that 16 gigawatts worth of data centers are set to open in the U.S. this year, but only a third of those (5GW) are actually under construction right now. Sightline expects 30-50% of these projects to be delayed. It’s not getting better for next year, either. Approximately 25GW of data centers are announced for deployment in 2027, only 6GW worth of infrastructure are actually under construction. The future is even less clear the further you go out. The vast majority of data centers planned for launch between 2028 and 2032 have yet to break ground and only a sliver are under construction. Those delays, it seems, appear to be twofold: first, the well-documented component shortage. Not just memory and storage, but batteries, electrical transformers, and circuit breakers. They all make up less than 10% of the cost to construct one data center, but as Andrew Likens, energy and infrastructure lead at AI data center provider Crusoe’s told Bloomberg, it’s impossible to build new data centers without them. “If one piece of your supply chain is delayed, then your whole project can’t deliver,” Likens said. “It is a pretty wild puzzle at the moment.” Second problem is the growing rebellion against data centers, both by citizens and governments alike. The latest pushback comes from the Seminole nation of Native Americans, who have banned data centers on their tribal lands. Of the data centers that are coming online in the next few months, the top states reflect what Synergy has been saying about data center migration to the interior of the country. Texas is leading the way, with 22.5 GW coming online, followed by New Mexico at 8.3 GW and Pennsylvania, which is making a major push for data centers to come to the state, at 7.1 GW.