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Data Centers in California

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Explore Markets in California

California – Global Tech Hub & Connectivity Leader

California is the premier North American market for any business targeting the global technology industry, the Asia-Pacific region, or the world’s fifth-largest economy. Its dense and diverse connectivity ecosystem provides unparalleled low-latency access to hyperscale clouds and international subsea cable systems, directly impacting application performance and user experience.

California: At A Glance

FactorRating / DataNotes
Global Connectivity GradeA+One of the most connected and mature data center markets in the world.
Direct Cloud On-RampsOver 19 – as of September 2025Alibaba Cloud, AWS, Azure, Google Cloud (GCP), IBM Cloud, Oracle Cloud.
Power Cost$0.082/kWh – as of September 2025Industrial rates are competitive for a major tech hub with significant renewable sources.
Disaster RiskHigh (89.02) – as of September 2025Seismic and wildfire risks are the primary concerns, mitigated by modern facility engineering.
Tax IncentivesYesIncludes DC-specific efficiency rebates and general green energy incentives.
Sales Tax7.25% – as of Midyear 2025California statewide sales tax rate. Local taxes may apply.

Network & Connectivity Ecosystem

With over 300 data centers, California is one of the most important connectivity hubs globally, serving as the primary digital gateway between North America and Asia.

Carrier Density & Carrier Neutrality California features a massive and competitive ecosystem with over 110 unique network providers, as of September 2025. This density ensures resilient, multi-carrier strategies are simple to implement in a large number of carrier-neutral facilities, particularly in the Los Angeles and Silicon Valley regions.

Direct Cloud On-Ramps With over 19 dedicated cloud on-ramps connecting to 21 distinct cloud regions, California offers exceptional private access to all major hyperscalers. Direct connectivity is available to Alibaba Cloud, AWS, Google Cloud (GCP), Microsoft Azure, IBM Cloud, and Oracle Cloud, minimizing latency and improving security for hybrid cloud workloads.

Internet Exchange Points (IXPs) The state hosts several of the world's most critical IXPs. Major exchanges in both Los Angeles and the Bay Area facilitate massive volumes of traffic, enabling efficient, low-cost peering that is essential for content delivery, gaming, and cloud service providers.

Bare Metal Bare metal server options are widely available from numerous providers. Companies like phoenixNAP and Hivelocity offer dedicated server solutions in California, providing the raw performance needed for demanding applications like AI/ML, analytics, and high-performance computing (HPC).

Power Analysis

California’s power infrastructure is a mix of mature, reliable grids in urban centers and a statewide push toward renewable energy.

Average Cost Of Power Industrial electricity averages $0.082/kWh, as of September 2025. While not the lowest in the nation, this cost is balanced by the market's immense strategic value and access to a grid with a renewable energy mix of approximately 40%.

Power Grid Reliability The power grids serving the primary data center clusters in Silicon Valley and Los Angeles are well-engineered and supported by multiple substations. Data center operators in these areas build facilities with significant N+1 or 2N redundancy to ensure uptime and insulate clients from any regional grid instability.

Market Access, Business & Tax Climate

Locating in California provides direct access to a massive economic engine and a highly skilled workforce.

Proximity To Key Business Districts Data centers are strategically located near two global business centers. Facilities in Northern California serve Silicon Valley's technology and R&D giants, while Southern California locations cater to the media, entertainment, and logistics industries of Los Angeles.

Regional Market Reach A California-based deployment can effectively serve the entire Western United States with low latency. It is also the default interconnection point for businesses targeting markets across the Pacific Rim and in Latin America.

Tax Advantage For Data Centers California offers specific tax and rebate programs that can lower the total cost of ownership for data center operations. Programs like Silicon Valley Power's data center efficiency rebate and state-level green energy incentives reward operators for building and running efficient, sustainable infrastructure.

Natural Disaster Risk

California has a High natural disaster risk profile, with a FEMA National Risk Index score of 89.02, as of September 2025. Site selection and facility engineering are critical to mitigating these factors. The primary risks for data center operations include:

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