Data Centers in Michigan

Michigan – Stable, Low-Risk Midwest Connectivity Hub

Michigan presents a compelling, low-risk environment for enterprises needing to serve the Great Lakes region and major Midwest commercial centers. With attractive tax incentives and a low natural disaster profile, the state offers a stable and cost-effective alternative to more volatile coastal markets, ensuring high uptime for critical applications.

Michigan: At A Glance

Network & Connectivity Ecosystem

Michigan's connectivity is solid, anchored by a healthy mix of providers in key metro areas like Detroit, Grand Rapids, and Southfield. The ecosystem provides reliable, low-latency access for a wide range of enterprise needs.

• Carrier Density & Carrier Neutrality: With over 18 network providers operating 39 data centers, Michigan offers substantial carrier diversity, as of September 2025. This ensures competitive pricing and resilient network design options in carrier-neutral facilities.

• Direct Cloud On-Ramps: As of September 2025, Michigan has no direct public cloud on-ramps. Businesses connect to cloud providers in major hubs like Chicago through private network interconnects (PNI) or dedicated wavelength services.

• Internet Exchange Points (IXPs): The Detroit Internet Exchange (DET-IX) is the primary public peering point in the state, facilitating efficient local traffic exchange. Most large-scale peering is conducted privately or routed through Chicago's more extensive ecosystem.

• Bare Metal: Bare metal server solutions are readily available from providers in the state. Companies like Hivelocity and ColoCrossing offer dedicated server options for workloads requiring maximum performance and control.

Power Analysis

Michigan's power infrastructure is well-suited for supporting data center operations, combining reasonable costs with a reliable grid.

• Average Cost Of Power: Industrial electricity rates generally fall within a competitive range of $0.09 to $0.12 per kWh, as of September 2025. These predictable costs help data center operators maintain stable operational budgets.

• Power Grid Reliability: The state's power grid is robust, especially in the metropolitan areas where data centers are concentrated. The infrastructure benefits from multi-substation support and a generation mix that includes 11% renewables, with wind power being a significant component.

Market Access, Business & Tax Climate

Michigan offers strategic access to key North American markets alongside a favorable business and tax environment for technology infrastructure.

• Proximity To Key Business Districts: Data centers are strategically located near Detroit's automotive and manufacturing hubs, Grand Rapids' healthcare and technology sectors, and Lansing's government centers. This proximity enables low-latency connectivity for local enterprise and research institutions.

• Regional Market Reach: From its central location in the Great Lakes region, Michigan can effectively serve a large population base across the Midwest and into Canada, including markets like Chicago, Toronto, and Cleveland.

• Tax Advantage For Data Centers: Michigan offers a significant sales and use tax exemption on qualified data center equipment. This incentive directly reduces the capital expenditure required to build, expand, or refresh technology infrastructure, lowering the total cost of ownership.

Natural Disaster Risk

Michigan has one of the lowest natural disaster risk profiles in the United States, making it an ideal location for disaster recovery and primary production sites.

The state has a FEMA National Risk Index score of 9.32, rating as "Very Low," as of September 2025. The primary environmental risks are manageable and primarily related to severe weather events. Key risks to consider include winter storms, strong winds, hail, and tornadoes. The state has minimal exposure to seismic, hurricane, or widespread wildfire events that affect other major data center markets.