Data Centers in Lexington

Lexington – Cost-Effective Bluegrass Region Hub

Lexington, Kentucky, offers a compelling, low-cost alternative to primary data center markets. It is an ideal location for businesses prioritizing budget-friendly power and favorable tax incentives for disaster recovery, secondary workloads, and regional service delivery. This market ensures operational resilience without the high operating expenses of larger metropolitan areas.

Lexington: At A Glance

Network & Connectivity Ecosystem

Lexington provides a reliable connectivity foundation for regional operations, though it is not a primary interconnection hub.

Carrier Density & Carrier Neutrality: The market features access to over 3 providers, as of September 2025. Carrier-neutral facilities offer diverse fiber pathways from national and regional carriers, sufficient for enterprise-grade redundancy.

Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Lexington, as of September 2025. Secure, low-latency connections to major cloud providers are established through private network links to nearby hubs like Cincinnati and Columbus.

Internet Exchange Points (IXPs): Public peering is limited within Lexington. Most traffic exchange occurs through private peering arrangements inside local data centers or is routed through major exchange points in larger regional markets.

Bare Metal: Bare metal server options are available in the broader region, often deployed in nearby markets to serve Lexington. Providers like ColoCrossing can service the area effectively.

Power Analysis

Kentucky's power landscape is a significant advantage for data center operators, defined by low costs and a stable grid.

Average Cost Of Power: Industrial power rates average $0.06/kWh, as of 2023, making Lexington one of the more affordable markets in the United States. This low cost directly reduces the total cost of ownership for power-intensive infrastructure. The grid is primarily supplied by coal (~70%) and natural gas (~25%).

Power Grid Reliability: The electrical grid serving the Lexington area is well-engineered for industrial use. Data centers typically have access to redundant power feeds from separate substations, ensuring high levels of uptime for critical operations.

Market Access, Business & Tax Climate

Lexington's strategic location and business-friendly environment support both local and regional service delivery.

Proximity To Key Business Districts: Data centers in Lexington serve the city's core industries, including healthcare, education (University of Kentucky), and manufacturing. The location provides low-latency connectivity for local enterprise operations and research institutions.

Regional Market Reach: From its central Kentucky location, Lexington effectively serves businesses throughout the Ohio Valley region, including southern Ohio and eastern Indiana. It is a strong base for disaster recovery sites supporting primary operations in larger, more expensive Midwest cities.

Tax Advantage For Data Centers: Kentucky offers significant, data center-specific tax incentives that lower capital and operational expenses. The state's sales and use tax exemption on equipment and software is a primary financial benefit that makes building or expanding a facility highly attractive.

Natural Disaster Risk

Lexington has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 37.13 out of 100, as of September 2025. This score is considered very low relative to the national average. The area is not prone to major catastrophic events like hurricanes or significant seismic activity.

Primary risks are atmospheric and weather-related, including:

• Tornado
• Severe Wind
• Hail
• Ice Storm
• Lightning
• Riverine Flooding
• Winter Weather