2025
Global Data Center Market Report
Regional Market Overviews
United States
The US leads the global data center market, driven by its strong economy, the presence of top technology companies, and increasing demand for digital transformation across multiple industries (Mordor Intelligence, 2025) (Statista, 2024).
As of 2024, the US data center market is estimated to reach a total IT capacity of 21.0GW, representing approximately 35.0% of the global market (Utility Drive, 2024) (FERC, 2024) (Mordor Intelligence, 2024). Emerging technologies like edge computing, coupled with significant investments in digital infrastructure, are the main forces behind rising demand. Moreover, the growing adoption of cloud services for data storage and management is increasing the need for larger data center capacity (Mordor Intelligence, 2025) (Statista, 2024) (Mordor Intelligence, 2025).
Northern Virginia has emerged as the leading data center market in the US, accounting for 23.4% of the country’s total installed capacity. The region’s prominence is driven by the increasing demand for large-scale self-build facilities from hyperscalers and colocation providers (JLL, 2024) (Cushman & Wakefield, 2024).
GDP (Current Prices) USD (2023) | 27,721 Bn |
Projected Average GDP Growth (2024-2028) | 2.2% |
10-year Govt Bond Yield (12-month rolling average) | 4.3% |
Country Credit Rating | AA+ |
Renewable Energy Share | 16% |
Data Center Capacity (Q1 2024) | 21,000MW |
Note: Renewable Energy Share excludes hydro-power
Market Dynamics and Growth Factors
The shift from traditional enterprise models to cloud-based services is driving capacity growth in the US data center market. As cloud and hyperscale providers dominate, enterprises are exploring distributed cloud environments or outsourcing their data center needs. The growing adoption of cloud services is prompting businesses to reassess their options due to increased competition for power, limited colocation space, latency issues, rising costs, and security concerns. This is driving companies to seek more flexible solutions (JLL, 2024).
The growing demand for generative AI, which requires significant power, is also fuelling the US data center market. With ground- up construction unable to keep pace with this demand, existing data centers are being expanded. Enterprises struggling with on- premises AI applications are turning to colocation providers, who are upgrading infrastructure, while hyperscalers are building AI-optimized facilities. This trend underscores the link between AI advancements and data center capacity (JLL, 2024).
The US data center market’s diversity results in varied growth drivers across regions. In Northern Virginia, the largest market with 4.9GW capacity (as of mid-2024), cloud services drove 82% of demand in 2023. Major players like AWS and Microsoft, operating multiple facilities, are the largest colocation tenants and key developers of self-built centers in the area (Cushman & Wakefield, 2024) (JLL, 2024) (Cushman & Wakefield, 2024) (DC Byte, 2024). Economic incentives, such as sales and use tax exemptions, along with proximity to the federal government and defence firms, make the region attractive for data center expansion. While Ashburn remains the primary hub, power and land shortages are pushing data centers to expand into areas like Manassas, Herndon, Sterling, and Prince William County, offering better access to resources. This diversification is positioning Northern Virginia as a broader statewide market, meeting growing data center demand while reducing pressure on Ashburn (Cushman & Wakefield, 2024) (Inside Climate News, 2024).
In the Northwest US, Portland, Oregon, with an operational capacity of 1.6GW, has established itself as a key data center market, particularly in the Hillsboro data center cluster. Growth in this area is driven by investments from hyperscalers and colocation providers, fuelled by the availability of abundant renewable energy, affordable land prices, and proximity to West Coast markets (Cushman & Wakefield, 2024) (Cushman & Wakefield, 2024). As per the ‘Cleanest Electricity States in the US – 2024 Study’, Oregon ranked second among US states for clean energy generation, with 76.3% of its total capacity coming from renewable sources, according to the US Energy Information Administration. This focus on clean energy makes Oregon an attractive location for data center development (Smart Asset, 2024).
Atlanta’s data center market, with a capacity of 1.4GW, is expanding as major colocation providers establish large-scale campuses in the Douglasville and Lithia Springs submarkets. The region is set to accommodate multiple projects at various stages of development, ensuring a continuous influx of new data centers. Both colocation providers and hyperscalers are actively securing new sites, with significant acquisitions by Microsoft, Switch, and Vantage Data Centers in 2024. Growth prospects remain strong, driven by affordable and accessible land, power constraints in other regions, a business- friendly climate, and rising investor interest (Cushman & Wakefield, 2024).
Source: Utility Drive and FERC
Note: Latest figures (mid-2024) as available for Northern Virginia has been taken to calculate its market share
In the Chicago market, with a 1.3GW capacity, hyperscalers’ demand for large data center spaces in established submarkets like Hoffman Estates and Elk Grove Village has been a key driver. Growth has also come from repurposing defunct office campuses into data centers, a strategy employed by major players like CloudHQ, Aligned Data Centers, and NTT to bypass competition for new space and leverage existing infrastructure (Cushman & Wakefield, 2024) (Cushman & Wakefield, 2024).
Phoenix, Arizona, with a 957.0MW capacity, is experiencing rapid growth driven by increasing demand from hyperscale cloud providers and colocation services. Growth is further fuelled by established players’ expansion and the entry of new companies such as Prime Data Centers and Edged Energy (Cushman & Wakefield, 2024) (Cushman & Wakefield, 2024). Hyperscalers such as Meta and Google are making substantial investments in the Phoenix data center market, with Meta committing $1.0 Bn and Google investing $600.0 Mn for the development of new facilities (Arizona Technology Council, 2024) (Construction Drive, 2023). Arizona’s highly reliable power grid (ranked second-best in the US), along with ongoing solar developments around Phoenix, has bolstered its data center market. Ranked the top city for solar energy based on factors like roof viability, climate, and affordability, Phoenix is an appealing choice for eco-conscious data center developers (Axios Phoenix, 2024) (Roof Gnome, 2024).
The Silicon Valley market, with a 904.0MW capacity, is driven by demand from IT services, growing cloud service needs from hyperscalers, and the rising adoption of AI technologies (Cushman & Wakefield, 2024) (Cushman & Wakefield, 2024). In 2023, cloud services accounted for 70% of the end-user industry demand, with the remaining 30% coming from the broader technology sector (JLL, 2024) (Data Center Frontier, 2023).
The Dallas data center market, with a capacity of 848.0MW, is growing rapidly, particularly in South Dallas, driven by colocation demand and hyperscale builds due to better land availability and reliable power. Key players like Compass Data Centers, QTS, and DataBank have expanded their facilities. Columbus, Ohio, with 574.0MW capacity, is seeing significant colocation development, benefiting from affordable land and a deregulated power market. Meanwhile, the New York and New Jersey markets, with a combined 441.0MW capacity, are growing due to AI deployments and proximity to financial markets, particularly in New York City (Cushman & Wakefield, 2024) (JLL, 2024) (Brightlio, 2024) (Cushman & Wakefield, 2024) (DC Byte, 2024).
Policy Regulation
The US lacks comprehensive federal data privacy or sovereignty law, relying instead on industry- specific regulations. However, at least 15 states, including California, Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Montana, New Hampshire, New Jersey, Oregon, Tennessee, Texas, Utah and Virginia have enacted their own data privacy laws. Additionally, a recent executive order allowing the Attorney General to block bulk data transfers to certain countries may encourage more businesses to establish domestic data centers to ensure compliance with these regulations. State data breach laws require businesses to comply with each state’s regulations when personal data is compromised, emphasizing the protection of sensitive information and driving investment in secure data storage within the US (The International Comparative Legal Guides, 2024) (TechTarget, 2024).
Further, the US policy and regulatory directives for the data center market are increasingly focused on environmental accountability, aiming to standardize climate-related disclosures. A key development is the SEC Climate Disclosure Rules, adopted in March 2024, which currently apply to public companies. These rules mandate data center operators to report on climate governance, risks, and associated financial impacts. Consequently, data centers are expected to invest in energy-efficient infrastructure and renewable energy, ensuring transparent reporting of their sustainability initiatives (Techereti, 2023) (Nlyte Software, 2024). From an operational perspective, data centers must adopt several measures to reduce energy consumption. This includes upgrading to more efficient hardware and optimizing cooling systems. Additionally, implementing sustainable practices across operations, supply chain management and waste reduction is crucial (Nlyte Software, 2024).
Meanwhile, various states have introduced or are considering laws aimed at addressing the sustainability aspects of data centers. These regulations aim to limit the rapid expansion of data centers due to their high energy demands. In California, for example, businesses with revenues over $1.0 Bn, including data center operators, are required to report direct and indirect greenhouse gas (GHG) emissions starting in 2026 (based on 2025 data). This initiative highlights the growing regulatory emphasis on sustainability and accountability, encouraging hyperscalers and colocation providers to adopt more sustainable practices and improve transparency regarding their environmental impact (Data Center Knowledge, 2023). Washington has enacted a law requiring non-residential users, including data centers and crypto mining operators, to meet the state’s clean electricity purchasing standards. As a result, data centers can no longer buy non- compliant power, likely leading to increased operational costs as they turn to cleaner energy sources to ensure compliance (Baxtel, 2023) (OPB News, 2023).
In Virginia, several bills introduced in the state senate aim to regulate data centers with stricter carbon reduction and sustainability requirements. These proposals reflect the state’s intent to assess data centers’ broader climate impacts, including the investment needed for power grid upgrades and the effects on land, air, and water during site evaluations. Additionally, the regulations may tie tax credit eligibility to the use of renewable energy, further incentivizing data centers to adopt sustainable practices (Virginia Mercury, 2024).
Outlook
The US data center market’s total IT load capacity is expected to reach 35.0GW by 2030, up from 21.0GW in 2024, growing at 8.9% on average annually over the projection period (Utility Drive, 2024) (FERC, 2024). Revenue is projected to grow from $123.2 Bn in 2024 to $212.1 Bn by 2029, with a CAGR of 11.5%. Colocation revenues are projected to increase from $24.0 Bn in 2025 to $38.7 Bn in 2030 driven by a 10.0% CAGR (Statista, 2024) (Mordor Intelligence, 2025).
The market is expanding into peripheral regions due to space and power constraints in traditional hubs, driven by hyperscalers and colocation providers. For instance, Ashburn’s limitations are pushing investments to Southern Virginia, while rising costs in South Dallas are shifting growth toward East Dallas, with similar trends seen in Oregon as hyperscalers such as Apple, Google, Meta and Amazon move beyond Hillsboro into eastern Oregon (Cushman & Wakefield, 2024) (Cushman & Wakefield, 2024).
Interstate data center development is accelerating as land and power constraints in core markets like Virginia and Chicago shift investment to nearby states like North Carolina, Maryland, Indiana, and Wisconsin, which offer better resources and incentives. Major technology firms such as AWS, Google, and Meta are already planning large campuses in these regions, a trend expected to intensify as resource limitations continue in key markets (Cushman & Wakefield, 2024) (Cushman & Wakefield, 2024).
To meet growing data demands, large-scale data center parks, campuses, and multi-story facilities are emerging, maximizing land use and enabling flexible expansion. Notable examples include Tract’s 1.8GW park in Arizona, Quantum Loophole’s 2.0-2.5GW park in Maryland, and PowerHouse’s 800.0MW campus in Virginia, with vertical developments like DataBank’s three- story 40.0MW center in Dallas further optimizing space (Data Center Dynamics, 2024) (JLL, 2024).
Source: Statista
The growth of the US data center market depends on addressing regulatory and sustainability challenges, as state-level policies vary in the absence of unified federal regulation. While states like Georgia and Oregon resist sustainability laws to attract investments, others, such as Arkansas and Connecticut, balance incentives with clean energy standards. Additionally, the lack of federal data privacy laws adds uncertainty for investors, making states that align sustainability with competitiveness more attractive for long-term data center investments (Government Technology, 2021) (Illinois Department of Commerce, 2023) (Arkansas Senate, 2024) (Government Technology, 2024) (Department of Commerce, Maryland, 2024) (Kintsugi, 2024).
Overall, the US is well-positioned to maintain its leadership in the global data center market. Emerging challenges like land, power, and regulatory uncertainties are manageable due to the market’s dynamic and diversified nature. In the long run, this adaptability will ensure developers can access the necessary space and power on accelerated timelines to meet their capacity needs.