Data Centers in Alaska

Alaska – The Tax-Free Digital Infrastructure Edge

Executive Summary

Alaska offers a unique value proposition for specific data center deployments, particularly for organizations prioritizing capital expenditure savings. The complete absence of a statewide sales tax creates a compelling financial advantage for large-scale hardware purchases. This makes the market a strong choice for disaster recovery sites, data archiving, and workloads supporting regional industries like logistics, energy, and government.

Alaska: At A Glance

Network & Connectivity Ecosystem

Alaska's connectivity is concentrated in its primary economic centers and designed for resilience, though it does not possess the density of major Lower 48 markets.

Carrier Density & Carrier Neutrality The market has over 1 carrier present, as of September 2025. While carrier diversity is limited, key national providers offer services, connecting Alaska to primary hubs in the Pacific Northwest via resilient submarine cable systems.

Direct Cloud On-Ramps There are no direct public cloud on-ramps within Alaska, as of September 2025. Businesses connect to cloud providers by procuring private network services, such as MPLS or wavelength circuits, that terminate in major hubs like Seattle.

Internet Exchange Points (IXPs) Public peering is not a major feature of this market. Most interconnection occurs through private peering arrangements within local data centers or is routed through major exchange points in Seattle.

Bare Metal Bare metal server options are available from select providers, meeting regional demand for dedicated, high-performance computing. Providers like Hivelocity offer deployment capabilities to serve local and specialized workloads.

Power Analysis

Average Cost Of Power Industrial power costs typically range from $0.12 to $0.16 per kWh, as of September 2025. The state's power grid relies heavily on natural gas and petroleum, with renewables contributing about 15% of generation. This pricing can impact the total cost of ownership for power-intensive deployments.

Power Grid Reliability The power grid within Anchorage and other key commercial areas is engineered for local conditions and is generally reliable. Data centers in these locations leverage this infrastructure, though the state's vast geography presents unique energy distribution challenges not found in more compact markets.

Market Access, Business & Tax Climate

Proximity To Key Business Districts Data centers in Alaska are primarily located in the Anchorage area, serving the state's largest business hub. This provides connectivity for key local industries, including oil and gas, federal and state government agencies, logistics, and healthcare.

Regional Market Reach The state serves as a strategic point of presence for the entire Alaskan region and can act as a unique node for latency-sensitive applications related to Arctic shipping routes or satellite communications. It also offers a geographically separate disaster recovery location for businesses in the Pacific Northwest.

Tax Advantage For Data Centers The most significant financial benefit is Alaska's lack of a state sales tax. This directly reduces the capital expenditure required for servers, networking gear, and other data center hardware, making large-scale deployments more cost-effective.

Natural Disaster Risk

Alaska has a Moderate natural disaster risk profile, with a FEMA National Risk Index score of 45.05 out of 100, as of September 2025. The score reflects a significant exposure to specific geological and climatic hazards that require careful facility engineering and site selection.

Key risks include:

• Earthquake
• Avalanche
• Winter Weather
• Wildfire
• Coastal Flooding
• Riverine Flooding