U.S. hyperscalers shift market build-out targets to the Midwest and Texas

As hyperscalers look to scale operations to accommodate the growth of AI and cloud services, they are seeking new locations to house their facilities that can provide alternative sources of power, land and water. 

New data from Synergy shows that U.S. hyperscaler builds have begun to focus on facilities in the center of the country, particularly in Texas and Midwestern states.  

The research firm noted that at the end of 2025, Texas and the Midwest accounted for 33% of operational US hyperscale data center capacity, while its “pipeline of future hyperscale data centers shows that they will account for 53% of new capacity coming online over the next few years.”

And while Northern Virginia will continue to see the greatest concentration of data centers, as AI has driven up infrastructure investment, providers are targeting areas with more readily available power.

“While established hubs will remain strategically important, the center of gravity for new hyperscale investment is clearly moving elsewhere,” said John Dinsdale, chief analyst at Synergy Research Group.

Texas, Midwest rise

Hyperscaler data center providers are increasingly turning to markets like Texas and the Midwest to build new facilities.

In Texas, Microsoft took over a data center construction project in Abilene, Texas, after OpenAI declined to move forward with its own plans. Data center developer Crusoe is working with Microsoft to build two new “AI factory” buildings and an on-site power plant.

Driven by multiple major projects from Amazon, Google, Meta, Microsoft, OpenAI, and CoreWeave, the Midwest states, including Wisconsin, Indiana, Michigan, and Missouri, will all grow rapidly in importance.

Amazon, for instance, plans to invest an additional $15 billion in Northern Indiana to build a data center. The new project will add 2.4 gigawatts of data center capacity in the region.

Likewise, Google announced in February that it would build its first data center in Minnesota’s Pine Island, a town of about 4,000 people, some 70 miles southeast of Minneapolis. 

The data center will be located on a 480-acre site at Pine Island, a town of about 4,000 people, some 70 miles southeast of Minneapolis. 

The data center will be located on a 480-acre site at Pine Island, a town of about 4,000 people, some 70 miles southeast of Minneapolis.

“As infrastructure constraints intensify and market dynamics continue to shift, hyperscale providers are increasingly reallocating capital toward central U.S. regions, with Texas emerging as the primary focal point,” Dinsdale said. “A new wave of gigawatt-scale campuses is taking shape in non-traditional locations such as Abilene, Mount Pleasant, South Bend, El Paso, Boone County, and Kansas City.”

Cloud providers dominate

A big contributor to data center growth is the large cloud providers.

Offering an array of services, including SaaS, IaaS, PaaS, search, social networking, e-commerce, and gaming, the top cloud providers collectively had 1,360 operational hyperscale data centers at the end of 2025. According to Synergy’s research, 580 are in the research firm’s known pipeline of future hyperscale data centers, and another 803 data centers will come online in the next few years, of which 437 are in the US.

While there are more operational data centers than in the pipeline, Synergy said the pipeline has a larger overall capacity, reflecting that hyperscale data centers have continued to increase in IT capacity.

Amazon, Microsoft, and Google today have the broadest data center footprint and are the leading cloud providers.

In addition to a large data center footprint in their home US market, each of these providers has multiple data centers in several other countries. In aggregate, Synergy said, “the three now account for 58% of all hyperscale data center capacity.”

Meta, Alibaba, Tencent, Oracle, Apple, and ByteDance, then other relatively smaller hyperscale operators, follow the top three in the next tier. 

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