Data Centers in Ann Arbor
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Ann Arbor – Low-Risk Midwest Operations Hub
Ann Arbor provides a stable, low-risk environment for workloads that require proximity to the research, education, and automotive industries of the Great Lakes region. It is a practical choice for disaster recovery and secondary deployments supporting primary infrastructure in nearby Chicago. This market delivers operational resilience without the high costs and risks of a primary hub.
Ann Arbor: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity; fewer long-haul fiber routes than primary markets. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is available via private network extension to Chicago. |
| Power Cost | $0.09 - $0.11/kWh | 11% renewables. Favorable rates support cost-effective, high-density deployments. |
| Disaster Risk | Low (Score: 9.32) | Extremely low exposure to major natural disasters, enhancing uptime. |
| Tax Incentives | Yes | Includes a sales and use tax exemption for qualified equipment. |
| Sales Tax | 6.00% | Michigan state sales tax, as of July 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality
The Ann Arbor market features 2 providers operating 3 data centers, as of September 2025. This focused environment provides reliable regional connectivity, with most facilities offering carrier-neutral access to local and regional networks.
Direct Cloud On-Ramps
There are no direct public cloud on-ramps within Ann Arbor as of September 2025. Secure, low-latency connections to all major cloud providers, including AWS, Google Cloud, and Microsoft Azure, are established via dedicated network connections to the primary hub in Chicago.
Internet Exchange Points (IXPs)
Public peering is not a focus of the Ann Arbor market. Interconnection is primarily handled through private peering arrangements within local data centers or routed through major Internet Exchanges in Chicago.
Bare Metal
Bare metal server options are available in the region, offering dedicated compute for performance-sensitive applications. Providers such as Hivelocity and ColoCrossing can serve deployments in the area.
Power Analysis
Average Cost Of Power
Industrial electricity rates in the Ann Arbor area typically range from $0.09 to $0.11 per kWh, as of September 2025. This competitive pricing makes the market attractive for managing compute-intensive workloads. The state's power mix is sourced primarily from fossil fuels and nuclear, with renewables contributing 11% of the total.
Power Grid Reliability
Michigan's power grid is well-engineered to support industrial and commercial operations. Data centers in the region are supplied by redundant power feeds from multiple substations, ensuring high levels of uptime and service continuity.
Market Access, Business & Tax Climate
Proximity To Key Business Districts
Ann Arbor's data centers serve the University of Michigan's significant research community, the local technology sector, and the broader automotive industry centered around nearby Detroit. This proximity enables low-latency access for research, development, and advanced manufacturing workloads.
Regional Market Reach
From Ann Arbor, organizations can effectively serve end-users across Michigan, Ohio, and the Great Lakes region. The market also functions as an excellent disaster recovery location for businesses with primary infrastructure in Chicago, offering geographic separation while remaining within a manageable distance.
Tax Advantage For Data Centers
Michigan provides a significant sales and use tax exemption on qualified data center equipment. This incentive directly reduces the capital expenditure required to build or expand a data center footprint, lowering the total cost of ownership.
Natural Disaster Risk
Ann Arbor has a very low natural disaster risk profile, with a FEMA National Risk Index score of 9.32 out of 100, as of September 2025. This low-risk environment makes it an ideal location for critical infrastructure and business continuity.
The primary environmental risks to consider are severe weather events, including:
- Tornado
- Winter Weather
- Ice Storm
- Strong Wind
- Hail
- Heat & Cold Waves
