Data Centers in Minnesota

Minnesota – Low-Risk, High-Performance Hub

Minnesota is a premier market for businesses that require high uptime and consistent performance in a centrally located, low-risk environment. The state’s combination of attractive tax incentives, competitive power costs, and a robust network ecosystem provides a stable and cost-effective alternative to coastal data center hubs for serving the Upper Midwest.

Minnesota: At A Glance

Network & Connectivity Ecosystem

Minnesota has a mature and diverse connectivity landscape, centered around the Minneapolis-St. Paul metropolitan area. The market features excellent carrier density and direct cloud access, making it a strong choice for latency-sensitive applications serving the region.

Carrier Density & Carrier Neutrality: With over 30 unique network providers, as of September 2025, Minnesota offers a competitive environment for transit, transport, and dark fiber. Carrier-neutral facilities provide redundant access to multiple Tier 1 and regional networks, ensuring optimal routing and uptime.

Direct Cloud On-Ramps: The state is home to over 4 dedicated cloud on-ramps providing direct access to 11 cloud regions, as of September 2025. Private connections are available to major platforms, including AWS and Microsoft Azure, enabling secure, low-latency hybrid cloud architectures.

Internet Exchange Points (IXPs): The Midwest Internet Cooperative Exchange (MICE) is the primary public IXP in the state. It enhances regional network performance by enabling local peering between carriers and content providers, reducing reliance on long-haul traffic routes.

Bare Metal: Bare metal server options are readily available from multiple providers in Minnesota. Global suppliers like Hivelocity and phoenixNAP offer dedicated servers for workloads requiring maximum performance and control.

Power Analysis

Average Cost Of Power: The average industrial electricity rate is 8.43¢/kWh, as of 2021. This competitive pricing, particularly when compared to other major US markets, lowers operational expenditures for compute-heavy infrastructure.

Power Grid Reliability: Minnesota's power grid is well-engineered and reliable, particularly in the data center clusters around the Twin Cities. Facilities are typically supported by redundant utility feeds from separate substations, ensuring high levels of uptime for critical operations.

Market Access, Business & Tax Climate

Minnesota offers strategic access to a significant economic region combined with a favorable business climate for technology infrastructure investment.

Proximity To Key Business Districts: Data centers are located near the Minneapolis-St. Paul metro area, a major commercial hub. This proximity serves Fortune 500 companies in healthcare, retail, and finance, providing low-latency connectivity for their headquarters and core business applications.

Regional Market Reach: From its central location, Minnesota effectively serves as a digital gateway to the entire Upper Midwest. It is an ideal location for delivering services to end-users across Wisconsin, Iowa, North Dakota, and South Dakota.

Tax Advantage For Data Centers: Minnesota provides a significant sales tax exemption on equipment, software, and electricity for qualifying data centers. This incentive directly reduces the large capital investment required for new builds and expansions, improving the total cost of ownership.

Natural Disaster Risk

Minnesota has a very low natural disaster risk profile, with a FEMA National Risk Index score of 24.66 out of 100, as of September 2025. This minimizes the threat of service interruptions from major environmental events. The main risks are atmospheric and seasonal. Key considerations include severe winter weather, tornadoes, strong winds, and hail. The state has no exposure to hurricanes or earthquakes.