We assume tech clusters form around talent, but the AI boom is increasingly chasing cheap power — how Northern Virginia, Iowa and Ireland became data

Key Points:

• The location of new data-centre campuses is increasingly determined by access to cheap, plentiful electricity rather than proximity to engineering talent, marking a shift in tech geography priorities.
• Iowa exemplifies this trend with its abundant, low-cost wind power attracting major tech companies like Google, Microsoft, Meta, and Apple to build cloud campuses, benefiting from cheap renewable energy, open land, and tax incentives.
• Northern Virginia, the world’s largest data-centre market, faces grid capacity constraints despite its historic infrastructure and network effects, causing a slowdown in new data-centre capacity growth.
• Ireland’s data centres consume a significant portion of national electricity, leading to a temporary freeze on new connections until stricter renewable energy sourcing rules were implemented, showing that demand can outstrip supply even in key hubs.
• Overall, electricity availability has become the primary factor in data-centre site selection, surpassing talent pools and infrastructure, with future data-centre growth dependent on where new power generation is developed.