, /PRNewswire/ – U.S. data center demand is in a period of unprecedented acceleration driven by AI, cloud scale-outs, and digital modernization, while power availability, transmission constraints, and siting timelines have become the primary gating factors for capacity delivery across key U.S. metros and emerging regions. Operators and hyperscalers are adapting with liquid cooling for high‑density AI racks, multi‑gigawatt campus designs, grid‑adjacent and on‑site power strategies, and a pivot toward secondary markets offering faster approvals, incentives, and abundant land and fiber.

Market overview

The U.S. Data Center Market size was valued at USD 80,331.12 million in 2020 to USD 1,38,095.08 million in 2025 and is anticipated to reach USD 3,81,750.98 million by 2035, at a CAGR of 10.65% during the forecast period. This growth trajectory reflects surging AI and machine learning workloads, hyperscale cloud expansions, edge build‑outs, and a significant modernization wave for enterprise and government workloads, all of which intensify demand for compute density, interconnection, and power. As capital inflows and multi‑billion‑dollar campus announcements proliferate, the sector’s ability to translate demand into delivered megawatts is increasingly defined by power procurement, queue positions, and cooling innovation, rather than by land or capital scarcity alone.

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Key growth determinants

AI and high‑density compute AI training and inference are re‑shaping facility design, pushing rack densities beyond legacy air cooling limits and catalyzing liquid cooling adoption to reduce downtime risk and boost efficiency at scale. 451 Research projects rapid growth in grid power demand from U.S. data centers through 2030, largely driven by AI and high‑performance compute, reinforcing the structural nature of this demand driver. Deloitte likewise foresees AI data centers’ power needs expanding by orders of magnitude by 2035, underscoring a long runway for AI‑ready infrastructure.

**Hyperscale and cloud platform expansion **U.S. hyperscalers continue to add capacity within core hubs while seeding mega‑campuses in new states to diversify risk and accelerate timelines, supported by massive multi‑year capex and supply‑chain partnerships. Announced projects such as Vantage’s “Frontier” campus and OpenAI‑Oracle‑Vantage “Stargate” sites illustrate the scale of pipeline assets targeting multi‑hundred‑MW to multi‑GW delivery for AI and cloud workloads. These expansions deepen regional ecosystems, attracting colocation, interconnect, and ecosystem partners around anchor tenants.

Modernization and interconnection Enterprises and public sectors are re‑platforming legacy applications, adopting hybrid multi‑cloud and distributed architectures that require resilient interconnection, neutral meet‑me hubs, and low‑latency edge nodes. This transition fuels sustained colocation demand, network densification, and investments in automation, orchestration, and DCIM to manage complex, mixed environments efficiently. The compound effect is durable multi‑segment demand—from hyperscale to retail colocation to edge—supporting market breadth and depth.

Key growth barriers

Power availability and transmission constraints Power queues are swelling and interconnection timelines lengthening, delaying capacity delivery in top U.S. metros; utilities are retooling tariffs and planning processes to grapple with AI‑era loads. Deloitte estimates AI data center power could reach 123 GW by 2035 in the U.S., highlighting the chasm between current grid capacity and anticipated demand. These constraints are steering site selection toward markets with faster interconnects, new generation, or viable on‑site/near‑site alternatives.

Permitting, siting, and community pushback High‑profile projects increasingly face permitting complexity, water and land‑use scrutiny, and community concerns about noise, traffic, and local grid impacts, stretching timelines and adding cost. Policy shifts such as specialized tariffs and evolving incentive frameworks can alter project economics mid‑stream, introducing planning risk for operators and suppliers. These headwinds push developers to cultivate secondary markets with streamlined approvals and supportive policy environments.

Supply chain and technology transitions High‑density AI buildouts require specialized electrical and mechanical gear, liquid cooling components, and longer‑lead transformers, with persistent supply frictions raising delivery risk. Rapid technology change—GPU generations, cooling methods, and software-defined operations—forces design adaptability while operators manage stranded capacity risk and retrofit complexity. Capital intensity and financing costs add further pressure to sequence builds precisely with customer ramps.

Key market trends

Liquid cooling goes mainstream AI racks are driving widespread adoption of direct‑to‑chip and immersion cooling to increase density, energy efficiency, and reliability across training and inference clusters. Large campus designs are integrating hybrid cooling topologies and closed‑loop systems to reduce water consumption and enhance sustainability profiles under regulatory and stakeholder pressure. As standards mature, procurement and operations teams are institutionalizing liquid readiness in new builds and expansions.

Multi‑GW campuses and power strategies Developers are planning multi‑gigawatt campuses with phased energization, leveraging long‑term power contracts, on‑site generation options, and grid‑adjacent designs to de‑risk delivery. The emergence of 1–2 GW project blueprints—and discussions of even larger footprints—signals a durable shift in scale expectations for AI infrastructure. Financing consortia and green‑lending structures are becoming more common to align capital with sustainability commitments at extreme scale.

Shift toward secondary markets While Northern Virginia, Phoenix, Dallas–Fort Worth, Chicago, and Atlanta remain pillars, power constraints and cost dynamics are accelerating growth in Ohio, Michigan, the Carolinas, Central Washington, and parts of Texas and Oregon. New announcements, including Michigan’s first hyperscale campus, highlight policy incentives and strategic siting around transmission and fiber corridors in emerging metros. This dispersion builds resilience in national capacity while diversifying local economic benefits and workforce development.

Key opportunities

Grid partnerships and accelerated interconnect Collaboration with utilities on substation builds, dedicated feeders, and advanced planning can materially compress timelines and unlock stranded load pockets in congested regions. Creative tariff structures and demand‑side management programs, including firm service commitments for large users, enable predictable economics and grid stability. Developers with utility‑grade expertise and early interconnect positions will command advantage in delivering AI‑class capacity on schedule.

Sustainable power and thermal innovation Investments in renewables PPAs, long‑duration storage, waste‑heat reuse, and water‑efficient cooling architectures align with enterprise sustainability mandates and regulatory expectations. Liquid cooling standardization and modular thermal blocks for 100–250 kW racks open retrofit and greenfield pathways with measurable PUE/WUE improvements. Integrating lifecycle carbon tracking and circular equipment strategies enhances competitiveness in hyperscale RFPs.

Edge, interconnect, and AI services Latency‑sensitive applications, content distribution, and AI inference create openings for edge micro‑data centers, regional interconnect hubs, and GPUs‑as‑a‑service offerings near end users. Neutral interconnection fabrics and automation/orchestration platforms are differentiators as hybrid multi‑cloud traffic patterns proliferate. Colocation providers with AI‑ready pods, liquid options, and bundled managed services can capture enterprise and mid‑market demand.

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Competitive Insights:

• Equinix, Inc.
• Digital Realty Trust, Inc.
• NTT Communications Corporation
• CyrusOne Inc.
• Microsoft Corporation
• Amazon Web Services, Inc. (AWS)
• Google LLC (Alphabet Inc.)
• Hewlett Packard Enterprise (HPE)
• Iron Mountain Data Centers

Regional analysis

Northern Virginia remains the bellwether for scale and interconnection, but power queue congestion is redirecting some expansions toward the Carolinas, Ohio, and Michigan, where incentives and land availability are paired with improving transmission access. Texas is bifurcating: established Dallas–Fort Worth remains strong, while West and Central Texas attract crypto‑anchored and AI‑ready projects with available power and large land banks, alongside announced mega‑campuses like Vantage Frontier and Stargate’s Texas components. The Pacific Northwest, especially Oregon and Central Washington, is benefiting from relatively favorable power dynamics and established fiber corridors, supporting both hyperscale and leased growth. The Midwest is emerging as a strategic AI corridor, with new multi‑hundred‑MW to gigawatt‑class plans in Ohio and Wisconsin, leveraging proximity to population centers and evolving policy support. Phoenix, Chicago, and Atlanta continue to deliver capacity but must navigate transmission, water, and permitting constraints that affect delivery sequencing and cost structures relative to newer contenders.

DC Market Insights’s Competitive Landscape Analysis

DC Market Insights evaluates the competitive landscape across four vectors: scale velocity, power strategy, thermal readiness, and ecosystem depth, benchmarking hyperscalers, colocation leaders, and specialized AI operators against real‑time project pipelines and interconnect positions. Companies advancing multi‑GW campuses with liquid‑ready designs, firmed power roadmaps, and accelerated interconnection are positioned to win AI and HPC workloads, while providers aligning sustainability credentials with green finance gain access to lower cost of capital at scale. Ecosystem builders—those expanding neutral interconnect, managed AI services, and edge adjacency—are set to capture diversified demand, whereas operators constrained by power queues or retrofit limitations face elongating delivery timelines in top hubs.

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DC Market Insights, headquartered at 128 City Road, London, EC1V 2NX, United Kingdom, is a dedicated research and consulting firm that empowers data center leaders with actionable intelligence. We combine rigorous market research, advanced analytics, and practical advisory support to help organizations make confident decisions in an increasingly complex digital infrastructure landscape. Our goal is to transform data into clarity, giving clients the ability to act decisively on strategy, investment, and execution.

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