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John Dinsdale, chief analyst at Synergy Research Group, told RCR Wireless News that energy access is now the dominant consideration for site selection
In sum – what to know:
Power priority – Synergy Research Group says availability of power has become the dominant factor in hyperscale site selection as AI-driven demand accelerates.
Inland shift – Texas and Midwest regions are set to account for 53% of new U.S. hyperscale capacity, up from 33% today.
Network impact – Expansion into remote locations is increasing demand for long-haul connectivity and reinforcing hybrid infrastructure strategies.
Power availability has emerged as the primary driver behind the geographic shift in U.S. hyperscale data center investment, according to Synergy Research Group, as operators increasingly move capacity toward central regions.
In an interview with RCR Wireless News, John Dinsdale, chief analyst at Synergy Research Group, said that while multiple factors influence site selection, energy access is now the dominant consideration. “A range of factors influence the choice of location for hyperscale infrastructure, including proximity to customers, availability and cost of real estate, availability and cost of power, networking infrastructure, ease of doing business, local financial incentives, political stability, and minimizing the impact of natural hazards. But with the extremely rapid growth in demand for AI technology and infrastructure, availability of power has now become the most dominant decision criteria.”
This shift is reflected in new data from Synergy, which shows hyperscale investment moving away from coastal hubs toward inland regions, particularly Texas and the Midwest. At the end of 2025, these regions accounted for 33% of operational U.S. hyperscale capacity, but are expected to represent 53% of new capacity in the pipeline.
The Synergy report also stated that Northern Virginia will remain the largest single data center hub, but the balance of new development is shifting as operators seek locations with more readily available power. Texas stands out as the most prominent state in the pipeline, while Midwestern states including Wisconsin, Indiana, Michigan and Missouri are attracting major projects from companies such as Amazon, Google, Meta, Microsoft, OpenAI and CoreWeave.
The inland expansion is also expected to reshape network requirements, particularly for long-distance connectivity. “For sure that demand will increase. Most of the new gigawatt campuses are not near big population centers or economic hubs. That increases some investments and operational costs, but the benefits typically far outweigh the downsides,” Dinsdale said.
Despite the inland shift, hyperscale operators are expected to maintain a hybrid geographic strategy, balancing remote, large-scale campuses with infrastructure closer to end users. “Hyperscale operators all have a mix of geographic locations and types of data centers. Some of their infrastructure has to be nearer to customers, but for less latency-sensitive workloads they can build their data centers in more remote locations. Hyperscale companies will continue to build some infrastructure nearer to customers, or they will use suitably positioned colocation facilities. Hyperscalers have always been big customers of colocation firms, both for large wholesale facilities and for smaller retail colocation needs. They will continue to rely a lot on colocation to meet their edge needs. Meanwhile, a lot of their bigger own-build data center investments are moving inland,” Dinsdale added.
