Data Centers in Kentucky

Kentucky – Low-Cost Power & Central US Reach

Kentucky presents a compelling option for businesses prioritizing low operational costs and strategic access to major Midwest and Southeast US markets. The state's extremely competitive power pricing, combined with a growing infrastructure base, makes it an ideal location for workloads that require reliable performance without the premium costs of primary data center hubs.

Kentucky: At A Glance

Network & Connectivity Ecosystem

Kentucky's connectivity is centered on providing reliable access to larger national hubs. It offers a practical and cost-effective alternative to deploying directly in more congested, expensive markets.

Carrier Density & Carrier Neutrality: The state is served by over 12 carriers as of September 2025. Facilities offer access to a mix of regional and national providers, with carrier-neutral colocation available in key metro areas like Louisville and Lexington.

Direct Cloud On-Ramps: There are no native public cloud on-ramps within Kentucky as of September 2025. Secure, private connections to cloud providers like AWS, Google Cloud (GCP), and Microsoft Azure are established via dedicated circuits to major interconnection hubs in Chicago or Ashburn.

Internet Exchange Points (IXPs): Public peering is limited within Kentucky. Most traffic exchange occurs through private network interconnects or is routed to major IXPs in nearby cities, ensuring efficient data transit to other networks.

Bare Metal: Bare metal server options are available from providers operating within the state. Companies like Hivelocity and ColoCrossing can provide dedicated servers for workloads requiring direct hardware access and consistent performance.

Power Analysis

Kentucky's primary advantage is its exceptionally low-cost and stable power, making it a prime location for high-density computing and cost-sensitive operations.

Average Cost Of Power: Industrial power rates average $0.06/kWh as of 2023, positioning Kentucky as one of the most affordable states for energy-intensive data center operations. This low cost directly reduces total cost of ownership for large-scale deployments. The grid is primarily supplied by coal (~70%) and natural gas (~25%).

Power Grid Reliability: The power infrastructure supporting Kentucky's data centers is well-engineered for uptime. Major facilities are typically fed by redundant power grids and benefit from multi-substation support, ensuring high levels of reliability for mission-critical applications.

Market Access, Business & Tax Climate

Kentucky combines a business-friendly tax environment with strategic geography, offering excellent access to both regional and national markets.

Proximity To Key Business Districts: Data centers in Louisville and Lexington are positioned to serve the state's core economic sectors, including manufacturing, logistics, and healthcare. This proximity allows for low-latency support for local enterprise and industrial operations.

Regional Market Reach: From its central location, Kentucky provides effective service delivery to a massive population base across the Midwest and Southeast. It is within a single day's drive of cities like Nashville, Indianapolis, Cincinnati, and St. Louis, making it a strategic hub for distribution and content delivery.

Tax Advantage For Data Centers: Kentucky offers significant tax benefits specifically for data centers. Approved projects can receive multi-year exemptions on sales and use taxes for equipment, software, and electricity, which dramatically lowers both initial capital investment and ongoing operational expenses.

Natural Disaster Risk

Kentucky has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 37.13 out of 100 as of September 2025. The primary environmental threats are atmospheric, not geologic, making risk mitigation straightforward for properly engineered facilities. Key risks include tornadoes, severe wind, hail, river flooding, and winter weather.