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Andrew Batson, global head of data center research at JLL, told RCR Wireless News that hyperscaler and AI-driven demand in the U.S. is increasingly targeting regions with available power and supportive regulatory environments
In sum – what to know:
Frontier markets dominate pipeline – 64% of projects target regions with surplus power and supportive regulation, with Texas and the Midwest leading activity.
Power delays reshape strategy – Four-year grid timelines can sideline projects, pushing developers toward natural gas and other off-grid solutions.
North America retains capex lead – Around 50% of global hyperscaler spending is expected in North America, with the U.S. maintaining roughly half of global capacity.
With 64% of the construction pipeline now concentrated in frontier markets, hyperscaler and AI-driven demand is increasingly targeting regions with available power and supportive regulatory environments, according to Andrew Batson, global head of data center research at JLL.
“Corporations are narrowing on regions that contain access to large-scale surplus power, with cooperative utilities, favorable data center regulations, zoning process, regional public support, reasonable access or proximity to a metro, and many other factors with each technology company carrying bespoke requirements,” Batson said in an interview with RCR Wireless News.
He noted that Texas “continues to experience extraordinary growth,” while the Midwest — including Indiana, Wisconsin and Ohio — “remains highly active.” The industry is also “expanding into Southeast markets that would not have been considered a decade ago.”
Power availability is increasingly decisive. “Unless a site with a four-year timeline to power is in an established or newly emerging market with significant demand, a four-year timeline usually de-prioritizes a site or region,” Batson said. In response, developers are turning to “non-grid connected power solutions,” with natural gas the “most prominent solution,” including mobile turbines for short-term needs and permanent on-site plants.
On capital allocation, Batson said that “roughly 50% of global capex is expected to be spent in North America.” With “approximately half of global data center capacity” already in the U.S., he added, “we do not expect that ratio to change meaningfully this decade.”
A new North America data center report from JLL indicates the sector has reached a turning point, with record-low vacancy and a growing share of new capacity being built outside traditional hubs. The study shows vacancy holding at 1% for the second consecutive year, while 64% of the 35 GW construction pipeline is now located in emerging or “frontier” markets.
