Data Centers in Fairbanks
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Fairbanks – Resilient Infrastructure on the Last Frontier
Executive Summary
Fairbanks serves as a strategic digital outpost for government, military, research, and resource-based industries operating in Interior Alaska. Its infrastructure is purpose-built for resilience in extreme conditions, making it a reliable choice for workloads that must remain local. This market provides a crucial anchor for digital services in a geographically isolated but economically vital region.
Fairbanks: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, but limited long-haul and international fiber routes. |
| Direct Cloud On-Ramps | 0 — as of September 2025 | Nearest major cloud hubs are in Seattle; private network extensions are required. |
| Power Cost | $0.16 - $0.20/kWh | Industrial power costs are above the national average, reflecting local generation. |
| Disaster Risk | Moderate (45.05) | The primary risks are environmental and seismic, not hurricane or widespread flooding. |
| Tax Incentives | Yes | Alaska has no statewide sales tax, offering direct savings on equipment purchases. |
| Sales Tax | 0.00% — as of Midyear 2025 | No state-level sales tax is levied on hardware, software, or services. |
Network & Connectivity Ecosystem
Fairbanks is a specialized market defined by its geographic isolation and the critical nature of the industries it serves. Connectivity is reliable but not abundant, making carrier selection straightforward.
Carrier Density & Carrier Neutrality: The market contains 2 data centers with service from a focused group of fewer than 5 regional and national carriers, as of September 2025. Carrier neutrality is available, but the ecosystem is small, demanding careful network planning.
Direct Cloud On-Ramps: There are 0 direct cloud on-ramps in Fairbanks. Access to hyperscale cloud providers like AWS, Google Cloud, and Microsoft Azure requires establishing private network connections to major hubs on the West Coast, primarily Seattle.
Internet Exchange Points (IXPs): Public peering is not a feature of this market. Interconnection is handled through private peering arrangements or is routed through major exchanges in the Pacific Northwest, such as the Seattle Internet Exchange (SIX).
Bare Metal: Bare metal server availability is typically managed through local providers. For broader options, businesses often utilize providers with a strong presence in West Coast markets, such as phoenixNAP, to serve Alaskan operations.
Power Analysis
Power in Fairbanks is characterized by high reliability and costs that reflect the logistics of operating in a remote northern climate. The grid is engineered to withstand extreme weather.
Average Cost Of Power: Businesses can expect industrial power rates between $0.16 and $0.20 per kWh, as of September 2025. These higher costs secure stable power from a grid heavily reliant on petroleum and natural gas, with a renewable mix of approximately 15%.
Power Grid Reliability: The local power grid is well-engineered for severe arctic conditions. This focus on durability provides a stable and reliable power source for critical digital infrastructure that cannot tolerate downtime.
Market Access, Business & Tax Climate
The Fairbanks market is driven by specific local and regional demand rather than broad enterprise colocation. Its business and tax environment offers clear advantages for capital-intensive deployments.
Proximity To Key Business Districts: Data centers in Fairbanks directly support operations at the University of Alaska, Fort Wainwright, Eielson Air Force Base, and corporate offices for the region's oil, gas, and mining sectors.
Regional Market Reach: Fairbanks is the primary service hub for the vast, sparsely populated Interior of Alaska. It provides the low-latency infrastructure necessary for local government services, logistics, and resource extraction operations across the region.
Tax Advantage For Data Centers: The most significant financial benefit is Alaska's lack of a statewide sales tax. This provides a direct, immediate cost reduction on all data center hardware, software, and equipment purchases, lowering the total cost of ownership.
Natural Disaster Risk
Fairbanks 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 risks are primarily geological and weather-related, with a notable absence of hurricane or major coastal threats.
Key environmental risks for infrastructure planners include:
- Earthquake
- Wildfire
- Winter Weather
- Cold Wave
- Riverine Flooding
- Avalanche
