A data center is a bet on geography. The power contract, the cooling architecture, the grid it connects to: these decisions lock in cost structure for a decade or more. This page maps the factors that determine where intelligence gets built, who controls the power underneath it, and where the next concentration clusters are forming right now.
Framework page · estimates from public sources · market structure lens, not an asset registry
Ten factors determine where a data center gets built.
| Factor | Signal | Best Case | Constraint Risk ⓘ |
|---|---|---|---|
| Power availability | Interconnection queue 5–7 yrs in constrained markets | Stranded renewable · nuclear PPA | High |
| Power cost | Largest long-run controllable input · PPAs lock in advantage | <$0.04/kWh | High |
| Water access | Cooling at hyperscale · millions of gallons annually | Abundant · cold climate | Medium |
| Fiber density | Latency and bandwidth · legacy hubs compound | Existing backbone node | Low |
| Land cost & availability | Hyperscaler campuses require 300–500 MW footprint | Rural adjacent to grid | Medium |
| Tax incentives | States compete · abatement deals shift project economics | Full abatement + grants | Low |
| Latency to demand | Inference is latency-sensitive · training is not | <20ms to major metros | Medium |
| Climate | Cold climates enable free air cooling · eliminates chiller plants | Nordic · Pacific Northwest | Low |
| Political stability | Long-lived assets require decade-plus horizon underwriting | Tier 1 OECD jurisdictions | Medium |
| Disaster risk | Seismic · flood · storm exposure drives insurance cost | Low seismic · inland · elevated | High in coastal markets |
The US power grid is not one market. Seven major ISOs/RTOs operate independently with different price structures, fuel mixes, and capacity constraints. Where your data center sits determines your commodity exposure.
| ISO / RTO | Geography | Avg Price | Fuel Mix | Data Center Significance |
|---|---|---|---|---|
| PJM | Mid-Atlantic · Midwest 13 states + DC |
$0.08–0.12/kWh | Gas · Nuclear · Coal | Largest ISO by load. Northern Virginia (Ashburn) is the world's largest data center market. Heavy nuclear base load. Capacity market exists. |
| ERCOT | Texas Isolated grid |
$0.04–0.08/kWh | Gas · Wind · Solar | Lowest average prices. Most volatile. No capacity market means price spikes during stress events (2021 winter storm). Fastest-growing data center market. Abundant wind in West Texas. |
| CAISO | California 90% of state load |
$0.18–0.28/kWh | Solar · Gas · Hydro | Most expensive major ISO. Renewable-heavy but intermittent. High regulatory burden. Silicon Valley legacy concentration but new builds increasingly moving to cheaper markets. |
| MISO | Midwest · South 15 states |
$0.05–0.08/kWh | Wind · Gas · Coal | Abundant cheap wind generation. Emerging data center destination. Chicago corridor benefits from fiber density and moderate power costs. |
| SPP | Central US 14 states |
$0.04–0.07/kWh | Wind · Gas | Among cheapest power in the US. Wind-heavy. Underbuilt fiber historically but improving. Emerging for stranded energy compute arbitrage. |
| NYISO | New York Full state |
$0.12–0.20/kWh | Gas · Nuclear · Hydro | Expensive. Strong nuclear base (Constellation). Financial services proximity drives some demand. Not a growth market for new large-scale builds. |
| ISO-NE | New England 6 states |
$0.14–0.22/kWh | Gas · Nuclear · Renewables | High cost, constrained gas pipeline infrastructure. Limited growth potential for power-intensive workloads. Existing facilities serve financial and academic demand. |
Two data centers with identical power contracts can have materially different effective costs. The difference is operational efficiency: how much of the power bill actually reaches the GPU.
| Technology | What It Does | PUE Impact | Cost |
|---|---|---|---|
| Free air cooling | Uses ambient outdoor air directly for cooling. Eliminates or reduces mechanical chiller plants. Only viable in cold climates (Nordic, Pacific Northwest, high altitude). | PUE 1.05–1.15 | Near zero opex |
| Liquid cooling (direct-to-chip) | Coolant circulates directly across GPU heat spreaders. Required for H100+ power densities. Eliminates hot-aisle/cold-aisle air management overhead. | PUE 1.03–1.10 | High capex |
| Evaporative cooling | Uses water evaporation to cool condenser coils. More efficient than mechanical chillers. High water consumption, problematic in drought-prone regions. | PUE 1.15–1.30 | Low capex |
| Air-cooled (traditional) | Raised floor or overhead air distribution. Cheap to build, inefficient to operate. Insufficient for modern GPU power densities without significant infrastructure investment. | PUE 1.40–1.80 | Lowest capex |
| Immersion cooling | Servers submerged in dielectric fluid. Theoretical best-in-class efficiency. High operational complexity, limited vendor ecosystem, not yet at hyperscale. | PUE 1.02–1.05 | Very high capex |
| Waste heat recovery | Captures exhaust heat for district heating or industrial processes. Converts a cost center into a revenue stream. Viable in dense urban areas with heat demand (Nordic cities). | Effective PUE <1.0 | Site-specific |
Major compute concentration follows infrastructure decisions made years or decades ago. These clusters compound. Each new facility lowers the cost of the next.
| Region | Grid | Why Here | Power Story | Constraint |
|---|---|---|---|---|
| Northern Virginia Ashburn corridor |
PJM | MAE-East fiber exchange (1992) created incumbent advantage. Government proximity. Dense peering. | Nuclear base · $0.07–0.09/kWh | Power constrained · long waits |
| Dallas / Fort Worth | ERCOT | Low power cost, no state income tax, central US geography, large labor market. | Gas + Wind · $0.05–0.07/kWh | Grid volatility risk |
| Phoenix / Mesa | WECC | Low land cost, tax incentives, stable geology. Amazon, Microsoft, Google all have major presence. | Gas + Solar · $0.07–0.10/kWh | Water scarcity · drought risk |
| Portland / Hillsboro | WECC | Cheap Columbia River hydro. Cool climate enables free air cooling. Intel manufacturing presence. | Hydro dominant · $0.05–0.07/kWh | Grid capacity limits growth |
| Chicago | MISO / PJM | Major fiber hub. Financial services demand. Lake Michigan cooling. Midwest wind access. | Gas + Nuclear · $0.07–0.09/kWh | Limited · room to grow |
| Nordic Region Finland · Sweden · Norway |
NordPool | Cheapest renewable power in the world. Free air cooling year-round. Political stability. Waste heat revenue potential. | Hydro + Wind · $0.03–0.05/kWh | Latency to US demand |
| Middle East UAE · Saudi Arabia |
Isolated grids | Sovereign AI ambition driving massive investment. Microsoft, Google, AWS all announced major commitments 2024–2025. | Gas dominant · subsidized | Heat · water · geopolitical |
The US Midwest is becoming the new data center belt. The geographic shift is already underway, driven by cheap land, available power, state tax incentives, and the constraints choking existing clusters. Three tiers: announced commitments, emerging pipelines, and locations where the site selection factors converge but major operators haven't yet arrived.
| Location | Grid | Operators | Scale | Power Story |
|---|---|---|---|---|
| Texas · Abilene · Milam · Shackelford ↗ | ERCOT | Stargate (OpenAI · Oracle · SoftBank) | 1.2 GW operational · 9 GW by 2029 | Cheap ERCOT power · wind abundant · grid volatility risk · water constrained |
| Wisconsin · Mount Pleasant · Port Washington ↗ | MISO | Microsoft ($13B+) · Stargate | Multi-GW planned | Former Foxconn site. Cold climate. MISO wind access. Fairwater AI campus online early 2026. |
| Indiana · New Carlisle · Jeffersonville · Fort Wayne ↗ | MISO | Amazon ($15B) · Meta ($10B) · Google | $25B+ committed | MISO grid. Cheap wind. Central geography. Low land cost. All three under active construction. |
| Ohio · Lordstown · Sunbury · New Albany ↗ | PJM | Amazon ($10B+) · Stargate · Microsoft · Meta · Google | 80+ facilities projected | PJM grid with nuclear base. Central US fiber routes. State actively recruiting. Stargate Lordstown active. |
| Michigan · Saline Township ↗ | MISO | Stargate · Hyperscale Data | Early stage | Adjacent to Indiana belt. MISO grid. Hyperscale Data acquired 48.5 acres southwest Michigan. |
| Tennessee · Lebanon ↗ | TVA | Meta ($10B+) | 1,500 acres · 13 buildings | TVA power (nuclear + hydro mix). Broke ground February 2026. Largest Meta campus announced to date. |
| Wyoming · Cheyenne ↗ | WECC | Microsoft | 3,200 acres · April 2026 | Cold climate. Wind power. No state income tax. Tripling existing Microsoft footprint. |
| New Mexico · Doña Ana County ↗ | WECC | Stargate | Active build | Solar abundant. Cheap land. National lab proximity (Sandia, Los Alamos). Water scarcity risk. |
| Quebec · Montréal · Québec City ↗ | Hydro-Québec | Microsoft ($7.5B CAD) · AWS · Google | 600 MW pipeline | Among cheapest clean power in North America. Cold climate. ⚠ Bill 69 (2024): government approval required for new grid connections >5 MW · regulatory overhang. |
| Location | Grid | Status | Why It's Moving |
|---|---|---|---|
| Scotland · 17 identified sites ↗ | National Grid UK | In planning system · no permits granted | 2–3 GW of proposed capacity identified by researchers. Scottish government actively promoting. Renewable dominant grid, cold climate, political stability. Constraint: latency to US, planning system slow. |
| Utah · Box Elder County ↗ | WECC | County vote pending · 2026 | Hyperscale proposal with Shark Tank investor backing. Cheap land. WECC grid. Still in local approval process. |
| Location | Grid | Factors That Converge | Primary Constraint |
|---|---|---|---|
| SPP Corridor ↗ Kansas · Oklahoma · Nebraska |
SPP | Cheapest wind power in the US. Abundant land. Low disaster risk. Central geography. | Underbuilt fiber · limited labor market |
| West Texas · Permian Basin ↗ Beyond existing Stargate footprint |
ERCOT | Stranded solar and wind at scale. ERCOT grid. Massive land availability. Low cost. | Water scarcity · dry cooling required |
We built this framework into an interactive map. Current clusters, announced builds, and the locations where the structural conditions converge but operators haven't yet arrived.
View the Map