Data Centers in Ann Arbor
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Ann Arbor – Midwest Hub for Research & Edge Computing
Executive Summary
Ann Arbor provides a strategic data center location for organizations tied to the University of Michigan and the Detroit automotive tech corridor. This market is ideal for edge computing, research workloads, and disaster recovery, offering a low-risk environment for businesses that require reliable infrastructure supporting innovation and regional operations. Its position ensures low-latency connectivity to Southeastern Michigan's primary economic hubs.
Ann Arbor: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A solid secondary market with good regional network access. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access is via network extension from primary hubs like Chicago. |
| Power Cost | $0.09 – $0.11/kWh | Mix: 11% renewables. Favorable rates for the region. |
| Disaster Risk | Low (NRI Score: 9.32) | Very low exposure to major natural disasters. |
| Tax Incentives | Yes | Includes sales and use tax exemptions for qualified data center equipment. |
| Sales Tax | 6.00% (Michigan State) | As of July 2025. |
Network & Connectivity Ecosystem
Ann Arbor's connectivity is characteristic of a well-developed secondary market, with reliable access to major national network hubs.
- Carrier Density & Carrier Neutrality: The market includes 3 data centers served by 2 unique network providers, as of September 2025. Carrier-neutral facilities provide the primary interconnection points.
- Direct Cloud On-Ramps: There are no native public cloud on-ramps in Ann Arbor, as of September 2025. Secure, private connections to all major cloud providers are established via network extensions from Chicago.
- Internet Exchange Points (IXPs): Peering is typically handled privately or through regional exchanges like the Detroit Internet Exchange (DET-IX), which improves traffic flow and reduces latency within Michigan.
- Bare Metal: Bare metal server options are available, offering dedicated compute resources for performance-sensitive applications. Providers such as Hivelocity can service deployments in the region.
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 helps manage operational expenses for compute-heavy deployments. The state's energy mix includes 11% renewables, primarily from wind.
- Power Grid Reliability: The regional power grid is well-engineered and stable, benefiting from infrastructure supporting major research and industrial facilities. Data centers in the area are typically served by redundant power feeds to ensure high levels of uptime.
Market Access, Business & Tax Climate
- Proximity To Key Business Districts: Data centers in Ann Arbor are positioned to serve the University of Michigan's significant research community, the city's growing tech startup scene, and the nearby automotive industry in Detroit. This proximity is critical for applications requiring minimal delay.
- Regional Market Reach: The market effectively serves Southeastern Michigan, providing a robust, low-latency infrastructure option for the 4.3 million people in the Detroit metropolitan area.
- Tax Advantage For Data Centers: Michigan offers significant tax incentives that lower the cost of building and operating a data center. The state provides a sales and use tax exemption on qualified data center equipment, which directly reduces capital expenditures for new deployments and hardware refreshes.
Natural Disaster Risk
Ann Arbor has a very low natural disaster risk profile, with a FEMA National Risk Index score of 9.32, as of September 2025. This makes it a secure location for critical infrastructure and business continuity. The primary environmental hazards to consider are atmospheric, including tornadoes, strong wind, winter weather, ice storms, and hail.
