Data Centers in Lexington
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Lexington – Reliable Infrastructure for the Bluegrass Region
Executive Summary
Lexington serves as a stable, cost-effective alternative for enterprises requiring a regional footprint without the high overhead of Tier 1 markets. Its combination of low industrial power rates and strategic proximity to Midwest manufacturing makes it a prime choice for resilient secondary operations and edge workloads.
Lexington: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Reliable fiber paths through the Appalachian corridor. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Private extensions available to Cincinnati or Nashville. |
| Power Cost | $0.06/kWh – as of September 2025 | Driven by a local mix of coal and natural gas. |
| Disaster Risk | Moderate (37.13/100) – as of September 2025 | Low frequency of major events; minor weather risks. |
| Tax Incentives | Yes – as of September 2025 | Includes multi-year sales and use tax exemptions. |
| Sales Tax | 6.00% – as of September 2025 | Standard Kentucky state sales tax rate. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: Carrier count: over 3. The market features ~5–10 carriers as of September 2025, providing diverse fiber routes through the Appalachian and Midwest corridors. This density ensures competitive pricing for local transport.
Direct Cloud On-Ramps: Over 0, enabling access to 0 cloud regions. As of September 2025, there are no native on-ramps for AWS, Google Cloud (GCP), or Microsoft Azure in the immediate metro area. Reliable access is achieved via private transport to the nearest regional hub in Cincinnati.
Internet Exchange Points (IXPs): Public peering options are limited within the city limits. Most local traffic exchanges occur via private peering or through the larger national exchanges in nearby hubs like Cincinnati or Nashville.
Bare Metal: Physical infrastructure services are available through regional providers. Companies like Hivelocity or Latitude.sh can provide reliable dedicated compute resources for local workloads needing physical isolation.
Power Analysis
Average Cost Of Power: Industrial electricity is priced at $0.06/kWh as of September 2025. This rate reflects a power mix of approximately 70% coal, 25% natural gas, and 5% renewables, ensuring predictable operational costs for large-scale deployments.
Power Grid Reliability: The local grid is well-engineered with support from multiple substations. This redundant design minimizes the risk of widespread outages for mission-critical facilities in the Lexington corridor.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers here are positioned for proximity to the central business district and the growing automotive manufacturing sector. This reduces latency for applications used in local supply chain management and corporate operations.
Regional Market Reach: Lexington effectively serves the Central Kentucky population and provides a strategic midpoint for traffic moving between the Midwest and the Southeast.
Tax Advantage For Data Centers: The state offers multi-year tax exemptions for qualifying data center projects. These incentives improve the bottom line for organizations deploying high-density hardware in the region.
Natural Disaster Risk
Lexington maintains a Moderate (37.13/100) risk profile as of September 2025. The area is categorized by its stability, though it faces occasional environmental challenges typical of the region.
The primary natural hazards include:
- Tornado
- Ice Storm
- River Flood
- Cold Wave
- Lightning
- Hail
Other risks are considered minor or not listed for this region. While the metro is inland and exempt from coastal threats, winter weather events are the most frequent cause for operational concern.
