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Data Centers in Chicago

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Chicago – North America's Connectivity Hub

Executive Summary

Chicago is a premier Tier 1 data center market for any business requiring low-latency access to North American financial exchanges and the continental United States. Its central location and dense network infrastructure minimize data transit times, directly improving application performance and securing high-value digital supply chains. For enterprises serving the Midwest, Chicago offers an unmatched combination of connectivity, power, and colocation options.

Chicago: At A Glance

FactorRating / DataNotes
Global Connectivity GradeA+A top-tier US market with dense fiber, carrier hotels, and international connectivity.
Direct Cloud On-RampsOver 7 – as of September 2025AWS, Azure, Google Cloud (GCP), IBM Cloud, and Oracle Cloud offer private access.
Power Cost$0.07 - $0.09/kWhCompetitive industrial rates for the region, with a growing low-carbon energy mix.
Disaster RiskModerate (Score: 49.54)Major risks are weather-related; facilities are engineered to mitigate these factors.
Tax IncentivesYesMultiple state-level tax credits and exemptions available for qualifying data center investments.
Sales Tax6.25% (Illinois)State-level sales tax, as of July 2025. Data center exemptions can apply.

Network & Connectivity Ecosystem

Chicago's history as a national railway and trading hub has translated directly into the digital age, making it one of the most connected cities in the world. The city is a critical intersection for long-haul fiber routes connecting the East and West coasts of the United States.

Carrier Density & Carrier Neutrality With over 75 unique network providers available as of September 2025, Chicago offers exceptional choice. This density fosters a competitive environment in carrier-neutral facilities, leading to better pricing and service for colocation customers.

Direct Cloud On-Ramps Private, dedicated access to all major hyperscale clouds is readily available from numerous facilities. As of September 2025, the market has over 7 on-ramps serving 16 cloud regions. Providers with a physical presence include:

  • AWS
  • Google Cloud (GCP)
  • Microsoft Azure
  • IBM Cloud
  • Oracle Cloud

Internet Exchange Points (IXPs) The city hosts several important IXPs, including one of the largest in North America. These exchanges allow networks to peer directly, reducing latency and costs for high-volume traffic exchange.

Bare Metal On-demand bare metal server options are available from multiple providers. Companies like Hivelocity and phoenixNAP offer dedicated servers for performance-intensive workloads.

Power Analysis

Average Cost Of Power Industrial electricity rates typically range from $0.07 to $0.09/kWh, as of September 2025. These competitive power costs provide a significant operational advantage for large-scale deployments compared to more expensive coastal markets.

Power Grid Reliability The power grid serving key data center zones is well-engineered and highly reliable. Major data center clusters benefit from redundant power feeds and multi-substation support, ensuring high levels of uptime for mission-critical operations.

Market Access, Business & Tax Climate

Proximity To Key Business Districts Data centers in Chicago are strategically located to serve the city’s massive financial, healthcare, and logistics industries. Colocation facilities provide low-latency connectivity to the Chicago Board Options Exchange (CBOE), the CME Group, and the central business district.

Regional Market Reach From Chicago, a single data center can effectively serve the entire Midwest region, reaching tens of millions of end-users with minimal delay. Its central location makes it an ideal disaster recovery site for businesses with primary operations on either coast.

Tax Advantage For Data Centers Illinois offers substantial tax incentives for data center development and operation. Qualifying projects can receive exemptions on sales and use taxes for equipment for up to 20 years, alongside valuable income tax credits that lower the total cost of ownership.

Natural Disaster Risk

Chicago has a moderate risk profile for natural disasters, with a FEMA National Risk Index score of 49.54 as of September 2025. The area is not exposed to hurricanes, and seismic risk is very low.

Primary environmental risks are atmospheric and seasonal, including:

  • Tornado and Strong Wind
  • Winter Weather and Ice Storms
  • Riverine Flooding
  • Hail

Data centers in this market are designed and built to withstand these specific threats, featuring hardened structures and sophisticated weather monitoring to ensure operational continuity.

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