The five fastest-growing cities for data centers in the U.S. share a crucial trait: an abundance of readily available power. According to a new report from Upwind, the projected data center capacity growth identifies Las Vegas/Reno as the leading hub, followed by Salt Lake City, Phoenix, Atlanta, and Dallas-Fort Worth. Notably, Northern Virginia has been excluded from this list due to its already substantial growth, resulting in a slower rate of increase comparatively.

This surge in data centers is largely fueled by the ongoing AI boom, indicating that expansion in this sector will persist. Data centers are regarded as economic boon, significantly contributing to local economies. On average, each center injects around $243.5 million, creating numerous construction jobs and sustaining permanent employment, alongside generating substantial tax revenue.

1. Las Vegas/Reno

Las Vegas/Reno is anticipated to experience a remarkable 953% growth in data center power capacity, requiring 3,812 MW of energy—sufficient to power approximately 3.1 million homes. A major factor for this increase is the state’s electricity rate, which is 35% lower than the national average. Most of Nevada’s power comes from renewable sources like geothermal, hydroelectric, and solar energy.

2. Salt Lake City

In Salt Lake City, a 699% increase in power capacity is expected, reaching up to 1,271 MW. The attractive tax incentives provided by Utah’s government are incentivizing major corporations, including Meta and Google, to establish operations here.

3. Phoenix

Phoenix is projected to see a 554% growth in data center capacity, with future needs estimated at 5,340 MW—equating to enough electricity for 4.4 million homes. The city’s energy production relies heavily on natural gas and renewable sources, including solar, enabling lower production costs compared to traditional methods.

4. Atlanta

In Atlanta, a 484% capacity increase is forecasted, leading to an energy demand of 3,125 MW, which would power about 2.6 million homes. Major investments are expected, including Microsoft’s $1.8 billion for upgrading three data facilities, doubling the city’s existing infrastructure.

5. Dallas-Fort Worth

Dallas-Fort Worth anticipates a capacity growth of 355%, collectively requiring 4,396 MW—enough to power 3.6 million homes. DFW is also appealing due to its land cost advantages, being significantly cheaper than regions like Boston and Silicon Valley.

Concurrent with this growth, Northern Virginia has solidified its position as the world’s largest data center hub. The capacity here is set to surpass its nearest competitor, Phoenix, by doubling in size. The planned data centers in Northern Virginia could meet the electricity needs of 9.1 million households, which is more than triple the total number of homes in Virginia and nearly three times New York City’s requirements. The forecast indicates that Virginia’s power supply will need to expand nearly double within the next 15 years to accommodate these developments, as demand is projected to rise by 85%.

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