Data Centers in Kentucky

Kentucky – Industrial Power and Mid-Continent Proximity

Executive Summary

Kentucky is a strategic destination for enterprises requiring a balance of mid-continent reach and some of the lowest operational costs in the country. This market serves as a resilient choice for disaster recovery and regional edge deployments that demand high availability without the premium price tags of Tier 1 hubs.

Kentucky: At A Glance

Network & Connectivity Ecosystem

Kentucky provides a stable environment for regional interconnection, specifically for businesses managing traffic between the Ohio Valley and the industrial Midwest.

Carrier Density & Carrier Neutrality: The market features over 12 providers as of September 2025. You will find a healthy mix of national carriers and regional fiber players providing resilient paths to larger peering points in the surrounding states.

Direct Cloud On-Ramps: There are currently 0 direct cloud on-ramps in the state as of September 2025. Organizations typically access AWS, Google Cloud (GCP), or Microsoft Azure via private transport or software-defined interconnects to major hubs in Chicago.

Internet Exchange Points (IXPs): Local peering is often handled privately or through localized fabrics like KY-IX. For large-scale peering requirements, most traffic is routed to nearby national exchanges to maintain high throughput.

Bare Metal: Ready-to-use compute resources are available from several providers, with services from companies like Hivelocity providing hardware options for those who prefer OpEx-based infrastructure as of September 2025.

Power Analysis

Energy costs in Kentucky remain a primary draw for heavy compute workloads and long-term storage projects that prioritize low overhead.

Average Cost Of Power: Industrial electricity averages $0.06/kWh as of September 2025. This pricing provides a significant competitive advantage over East Coast markets, directly lowering the total cost of ownership for high-density racks.

Power Grid Reliability: The grid is supported by a large-scale traditional generation base, providing a steady and reliable supply of energy. Utilities utilize well-engineered transmission networks to support the industrial corridors where most data centers are located.

Market Access, Business & Tax Climate

Kentucky positions itself as a business-friendly alternative for digital infrastructure, offering specific financial advantages for facility operators.

Proximity To Key Business Districts: Data centers are concentrated around Louisville and Lexington, providing low-latency access to the manufacturing, healthcare, and logistics sectors that drive the regional economy.

Regional Market Reach: This location effectively serves a broad population across the South and Midwest, acting as a gateway between the Great Lakes and the Sun Belt.

Tax Advantage For Data Centers: State legislation offers significant sales and use tax exemptions for specific data center investments. This helps lower the financial barrier for hardware refreshes and new facility construction.

Natural Disaster Risk

The FEMA National Risk Index for Kentucky sits at 37.13, resulting in a Moderate rating as of September 2025. While the state is generally insulated from coastal threats, facilities must account for regional weather patterns.

Primary Hazards: Tornadoes, Strong Wind, River Flooding, Winter Weather, and Ice Storms are the main environmental factors to consider for site selection.

Risk Profile: The Moderate score reflects the potential for severe storms and seasonal shifts, though most purpose-built facilities in the region are hardened to manage these risks effectively.

Inland Stability: Because the region is entirely landlocked, it faces zero direct risk from coastal flooding or tsunamis, making it a stable choice for inland redundancy and long-term data residency.