Data Centers in Silicon Valley

Silicon Valley – The Global Epicenter of Technical Interconnection

Executive Summary

Silicon Valley is the non-negotiable choice for enterprises requiring the absolute lowest latency to the world's primary cloud platforms and technology giants. This market provides the infrastructure density and massive scale required to secure a competitive edge in AI development and high-stakes digital performance.

Silicon Valley: At A Glance

Network & Connectivity Ecosystem

Silicon Valley is one of the most dense interconnection markets on the planet. The infrastructure here is purpose-built to manage extreme throughput and mission-critical uptime for global organizations.

Carrier Density & Carrier Neutrality: There are over 80 carriers available as of December 2025. This high density ensures competitive pricing and diverse routing options for every facility in the region.

Direct Cloud On-Ramps: Over 12 on-ramps provide direct, private access to 19 cloud regions as of December 2025. Available providers include AWS, Google Cloud (GCP), Microsoft Azure, Alibaba Cloud, Oracle Cloud, and IBM Cloud.

Internet Exchange Points (IXPs): Major exchanges such as the Equinix IX and SFMIX provide efficient local peering. This drastically reduces transit costs and latency for regional traffic by keeping data local.

Bare Metal: High-performance bare metal services are widely available through providers like Hivelocity and ColoCrossing as of December 2025.

Power Analysis

Power in this market is managed through a mix of investor-owned utilities and municipal providers, with a focus on increasing renewable energy sources.

Average Cost Of Power: The average industrial cost is approximately $0.18/kWh as of December 2025. While higher than some rural markets, the technical advantages and grid efficiency provide a clear return on investment for low-latency requirements.

Power Grid Reliability: Major data center corridors in Santa Clara and San Jose benefit from well-engineered, redundant grids. Many facilities are supported by multiple substations to ensure continuous operation during peak demand periods.

Market Access, Business & Tax Climate

The region serves as the primary gateway for data traffic between North America and the Asia-Pacific market, making it a critical hub for international business.

Proximity To Key Business Districts: Data centers are centrally located near major technology hubs in Santa Clara, San Jose, and Sunnyvale. This allows for sub-millisecond latency to the headquarters of the world’s largest tech companies.

Regional Market Reach: From this location, companies can effectively serve the entire West Coast of the United States and reach Pacific Rim markets via extensive subsea cable systems.

Tax Advantage For Data Centers: Special permits for large-scale construction and local utility rebates provide financial benefits for occupants. These programs directly reduce the cost of large-scale infrastructure deployment and long-term energy consumption.

Natural Disaster Risk

The Silicon Valley market has a High risk rating with a score of 89.02 as of December 2025. Facilities in this region are built to stringent seismic standards to protect hardware and maintain service continuity.

The primary natural hazards for the region include:

• Earthquake
• Wildfire
• Heat Wave
• Landslide
• Riverine Flood
• Drought
• Avalanche

Modern data centers in the area utilize resilient cooling systems and advanced structural engineering to mitigate these specific environmental risks. Hazard risks such as Tsunami are considered indirect or regional and do not materially impact the primary data center corridors.