Switched On What Really Determines Where Data Centers Get Built
Feb 25, 2026
Lloyd Arnold, a BNEF analyst who studies data center markets and infrastructure, discusses where large-scale data centers go and why. He breaks down five siting factors like energy, land and fiber. He compares incumbent hubs in Virginia and Texas with emerging regions such as the Nordics, Iberia, Brazil and the Middle East. He also covers powered land, AI-scale builds and trade-offs between speed and renewables.
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Energy Beats All Other Siting Factors
- Energy availability is the single most important factor for siting data centers because AI workloads are power constrained.
- Land permitting is nearly as critical since grid capacity is useless if developers cannot build on permitted land.
Fiber Matters More For Latency Workloads
- Fiber connectivity and existing live capacity are correlated and together matter for latency-sensitive workloads.
- AI workloads are less latency-sensitive, allowing AI sites to locate further from traditional fiber hubs.
Why Virginia And Texas Dominate
- Virginia tops the ranking due to an early internet exchange hub and 100% sales tax breaks for data center infrastructure.
- Texas scores highly because of abundant land, cheap power, and prior crypto mining deployments supporting large AI builds.