Because of exploding demand for computing power – driven in large part by AI – data center projects are rapidly being proposed and built in communities across the country. Data centers are massive projects that create large numbers of construction jobs and significant capital investment. There’s often competition between communities, counties and states to attract data centers because of the property and sales tax generating potential.
Here’s what you need to know about the boom.
As more devices are connected to the internet and AI explodes, demand for data centers is growing rapidly. A 2025 report from McKinsey projects the demand for data center computing capacity will nearly triple between now and 2030. This increase is driven in part by a nearly doubling of traditional, non-AI data center computing (i.e., email, cloud computing, web hosting). However, the bulk of the projected growth will be related to the increase in AI-related computing, which McKinsey projects to increase by 350% between 2025 and 2030.
Building data centers is complex and costly. The overall growth in data center computing capacity has spurred a race to construct new data centers and is driving increased demand for electricity, cooling capacity, technology, construction materials and workforce. Because AI-related computing requires significantly more power than traditional non-AI data center activities, electric demand is projected to triple by the end of the decade. The U.S. Department of Energy predicts that by the end of the decade, data centers could consume up to 12% of electricity produced in the U.S., up from about 4% today.
Data centers are popping up across the U.S. The computing capacity needs are so great that states far beyond the traditional technology hubs are experiencing a rapid increase in data center activities. Developers and technology firms are looking for flat sites, relatively affordable land and access to electricity and water. Many states are offering incentives to attract data centers, like Missouri’s Data Center Sales Tax Exemption Program. Virginia, with more than 600 data centers overall and more than a third of all global hyperscale data centers, is often described as the “data center capital of the world”. Missouri is home to nearly four dozen data centers, with Google, Meta, MasterCard, Citi and other major players operating in the state. While many of the data centers in Missouri are concentrated in the Kansas City and St. Louis metro areas, new projects are beginning to emerge at sites across the state.
Data centers don’t make sense everywhere. While the demand for new data centers is rapidly increasing, factors such as the availability of affordable power, proximity to transcontinental fiber optic data lines, cost and availability of construction materials, workforce availability, and community opposition impact where projects are built. If even one of these factors becomes an issue for a project developer, it can influence them to locate their data center in another community or state.
With the incredible growth of AI, the demand for new data centers will continue to increase over the next decade, creating significant opportunities. If Missouri maintains strong energy capacity and community support, its central location, fiber connectivity, affordability and skilled workforce position the state to win many more data center projects in the coming years.
