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I'll have to come back to this later. Going bike-riding.
As rising AI-driven demand for data centers has supported growth in key markets like Virginia and Texas, developers are increasingly casting a wider net — landing major projects in states that haven't historically been on the radar. While established hubs still dominate the landscape, regulatory hurdles, rising power costs and grid congestion are pushing developers to look elsewhere. In today's RBN blog, we'll examine the factors drawing large-scale data center projects to “non-key” states, with a close look at Indiana, Louisiana, North Carolina and Pennsylvania.
In Part 1 of this series, we examined the key factors driving data center development across seven leading states — Arizona, California, Georgia, Illinois, Ohio, Texas and Virginia. While Texas appears to lead in new development thanks to its business-friendly regulatory environment, relative strength in power and direct access to Permian Basin natural gas, it faces a familiar Catch-22 also seen in California, Illinois and Virginia: the same conditions that attract development are weakened when that development arrives. So far, that dilemma is partially responsible for the interest toward comparatively less-mature states like Arizona, Georgia and Ohio — but that doesn’t make them immune from those issues either.
With that in mind, large-scale projects are increasingly appearing outside of those key markets — a theme we initially explored in I Know Places. In Indiana, Amazon and Meta have both announced multibillion-dollar commitments. Louisiana was selected as the site for Meta’s Hyperion Data Center, which is under construction. Amazon has also announced investments in North Carolina, in addition to projects by Microsoft and other more speculative plans in the state. And lastly, Pennsylvania’s market is expected to grow, driven by a $20 billion investment from Amazon, on top of the highly publicized planned restart of a Three Mile Island nuclear unit to power Microsoft data centers.
Figure 1 below offers our analysis of these four states. Comparing each on the factors that determine where data centers are built hints at these projects’ rationales. The matrix indicates whether a specific factor (rows) is a relative strength (green plus sign), weakness (red minus sign), or neither (yellow tilde), in each state.
