Data Centers in Fairbanks

Fairbanks, Alaska – Strategic Edge with Zero State Sales Tax

Executive Summary

Fairbanks offers a unique digital infrastructure market for organizations serving Interior Alaska or requiring a strategic North American edge location. Its primary advantage is financial: the absence of a statewide sales tax provides a direct cost reduction on hardware investments. This market is best suited for government, military, research, and content delivery operations that prioritize geographic presence and tax efficiency over dense carrier ecosystems.

Fairbanks, Alaska: At A Glance

Network & Connectivity Ecosystem

Fairbanks is a specialized edge market, not a primary interconnection hub. Connectivity is focused on providing reliable service within a geographically vast and challenging region.

Carrier Density & Carrier Neutrality The market has a limited number of providers, with fewer than 5 major carriers present as of September 2025. This creates a focused but not densely competitive environment. True carrier neutrality is limited, with most colocation options tied to the primary facility operator.

Direct Cloud On-Ramps There are no direct cloud on-ramps in Fairbanks, as of September 2025. Businesses requiring dedicated cloud access must establish private network connections (PNI or wave) to major hubs on the West Coast, such as Seattle.

Internet Exchange Points (IXPs) Public peering is not a feature of this market. The majority of traffic exchange occurs privately or is routed through primary IXPs in Seattle for interconnection with the broader internet.

Bare Metal Bare metal server availability is present to support local processing and edge computing needs. Providers like Hivelocity can service deployments in edge locations to reduce latency for Alaskan end-users.

Power Analysis

Average Cost Of Power Industrial power costs are estimated between $0.18 and $0.22/kWh as of September 2025. This rate is higher than the national average, reflecting the logistics of fuel delivery and power generation in a remote location. The state's power grid relies heavily on petroleum and natural gas, making costs subject to fuel price fluctuations.

Power Grid Reliability The power grid is engineered for the unique demands of an arctic environment. While isolated from the contiguous U.S. grid, local power infrastructure is built to withstand extreme weather, offering reliable service for mission-critical facilities.

Market Access, Business & Tax Climate

Proximity To Key Business Districts Data centers in Fairbanks provide low-latency access to key regional institutions, including the University of Alaska Fairbanks, Fort Wainwright, and Eielson Air Force Base. This supports research, defense, and public sector operations throughout Interior Alaska.

Regional Market Reach Fairbanks is the principal digital gateway to the Alaskan Interior, a vast and sparsely populated region. It serves as a critical point of presence for delivering content and services to communities across the northern half of the state.

Tax Advantage For Data Centers The most compelling financial incentive is Alaska's lack of a state sales tax. This directly lowers capital expenditures by eliminating taxes on servers, networking gear, and other critical hardware purchases. This benefit significantly reduces the total cost of ownership for any large-scale equipment deployment.

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 risk profile is dominated by environmental and geological factors specific to its northern latitude and inland location.

Key risks include:

• Earthquake
• Wildfire
• Avalanche
• Riverine Flooding
• Severe Winter Weather
• Cold Wave