Data Centers in Arizona

Arizona – Scale and Stability in the Southwest

Executive Summary

Arizona is the preferred destination for enterprises requiring massive scale and geographical stability away from coastal risk zones. This region serves as a vital interconnection point for the Southwest, combining business friendly policies with high speed connectivity to West Coast population centers. For organizations prioritizing uptime and cost efficiency, the Arizona data center corridor provides resilient infrastructure for high performance workloads.

Arizona: At A Glance

Network & Connectivity Ecosystem

Arizona functions as a critical junction for transcontinental fiber and regional peering. The ecosystem is dense and competitive, ensuring low latency access across North America.

Carrier Density & Carrier Neutrality: Carrier count: over 45. The market features 45–50 unique providers as of September 2025, offering deep carrier neutrality and diverse pathing for enterprise redundancy.

Direct Cloud On-Ramps: Over 8, enabling access to 13 cloud regions. High performance private connections are available for AWS, Microsoft Azure, and Oracle Cloud as of September 2025.

Internet Exchange Points (IXPs): Phoenix-IX and DE-CIX Phoenix are the primary peering hubs, facilitating efficient traffic exchange and reducing transit costs for local workloads as of September 2025.

Bare Metal: On demand hardware is widely available through providers such as phoenixNAP and Hivelocity as of September 2025, supporting rapid scaling without the lead times of traditional colocation.

Power Analysis

Energy availability is a core strength of the Arizona market, with a grid purpose built to support industrial scale cooling and processing.

Average Cost Of Power: $0.08/kWh, as of September 2025. These competitive rates provide a significant operational advantage over neighboring high cost markets. The generation mix includes 27% nuclear and 13% solar, ensuring a reliable supply as of September 2025.

Power Grid Reliability: Regional utility providers maintain well engineered infrastructure with redundant transmission lines and multi substation support to ensure consistent delivery to major data center corridors as of September 2025.

Market Access, Business & Tax Climate

The business environment in Arizona is specifically structured to attract large scale digital infrastructure investments through targeted financial benefits.

Proximity To Key Business Districts: Facilities are centrally located near the Phoenix and Tucson technology hubs, providing low latency support for the aerospace and semiconductor industries as of September 2025.

Regional Market Reach: Arizona serves as the primary gateway for the Southwest United States, effectively reaching a population of over 30 million people within a sub 10ms round trip time as of September 2025.

Tax Advantage For Data Centers: The state provides a Transaction Privilege Tax (TPT) exemption for colocation tenants at certified facilities as of September 2025. This incentive significantly reduces the cost of server hardware and infrastructure refresh cycles for enterprise customers.

Natural Disaster Risk

The regional risk profile is categorized as High based on environmental factors common to the Southwest as of September 2025.

Risk Rubric: High (91.66 percentile) as of September 2025.

Primary Hazards:

• Drought
• Earthquake
• Heatwave
• Landslides
• Riverine Flooding
• Wildfire

While heatwaves are a frequent occurrence, local data centers use cooling systems specifically for extreme ambient temperatures to maintain uptime. Risks such as coastal flooding are non existent due to the inland geography of the state as of September 2025.