Data Centers in Arizona

Arizona – Premier Hub for Resilient Infrastructure

Arizona has established itself as a top-tier data center market for businesses that cannot afford downtime. Its combination of robust infrastructure, favorable tax policies, and relative safety from many natural disasters makes it a strategic alternative to coastal markets for deploying mission-critical applications and disaster recovery sites. This market is engineered for businesses prioritizing scalability, security, and low-latency connections to the entire US Southwest.

Arizona: At A Glance

Network & Connectivity Ecosystem

Arizona, particularly the Phoenix metro area, is a major network convergence point for the Southwestern United States.

Carrier Density & Carrier Neutrality With nearly 50 unique network providers present as of September 2025, the market offers deep and diverse connectivity options. Most premier facilities operate on a carrier-neutral basis, giving customers control over their network architecture and costs.

Direct Cloud On-Ramps The state features over 8 dedicated cloud on-ramps providing direct access to 13 cloud regions as of September 2025. This allows for secure, high-performance hybrid cloud deployments. Major cloud providers with a direct presence include:

• AWS
• Azure
• Oracle Cloud

Internet Exchange Points (IXPs) While private peering and direct interconnects inside data centers are common, public peering is available to improve network performance. The presence of exchanges like DE-CIX Phoenix facilitates efficient traffic exchange between networks, lowering latency and transit costs.

Bare Metal Bare metal server options are readily available throughout the Phoenix area for workloads requiring dedicated physical hardware. Providers such as phoenixNAP and Hivelocity offer on-demand compute and storage solutions.

Power Analysis

Average Cost Of Power Industrial power costs in Arizona typically range from $0.07 to $0.09/kWh as of September 2025. These competitive rates, combined with a favorable tax climate, help lower the total cost of operation for large-scale deployments. The state's power mix includes significant contributions from natural gas (45%), nuclear (27%), and solar (13%).

Power Grid Reliability The power grid serving the primary data center zones in Greater Phoenix is modern and reliable, engineered to support mission-critical facilities. Data centers are typically served by redundant substations from stable utility providers, ensuring high levels of uptime.

Market Access, Business & Tax Climate

Proximity To Key Business Districts Data centers are concentrated in tech corridors like Chandler, Mesa, and Phoenix, providing proximity to the "Silicon Desert" ecosystem. This location is ideal for aerospace, semiconductor, finance, and enterprise technology companies operating in the region.

Regional Market Reach From Arizona, organizations can effectively serve the entire US Southwest with low latency. It is a strategic hub for reaching customers and branch offices in Southern California, Nevada, Utah, Colorado, New Mexico, and Texas.

Tax Advantage For Data Centers Arizona offers specific tax programs that significantly reduce the financial burden of data center investment. The Computer Data Center (CDC) program provides exemptions from sales and use taxes on data center equipment for both owners and colocation tenants. This incentive directly lowers capital and operational expenditures, making the state financially attractive.

Natural Disaster Risk

Arizona has a High natural disaster risk profile, with a FEMA National Risk Index score of 91.66 as of September 2025. However, the risks are well understood and can be mitigated through proper site selection and facility engineering.

The primary environmental hazards for data center operations in Arizona are:

• Drought
• Heat Wave
• Riverine Flooding
• Wildfire
• Earthquake
• Landslide