Data Centers in North Dakota
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North Dakota – Low-Cost Power & Tax Incentives
North Dakota is an ideal market for organizations with power-intensive workloads that can tolerate higher latency to major population centers. Its extremely competitive industrial electricity rates and targeted sales tax exemptions on data center equipment deliver a significantly lower total cost of ownership. This makes it a prime location for high-performance computing, data archiving, and large-scale backup infrastructure.
North Dakota: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Good regional connectivity, but lacks major national peering hubs. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest hubs are in Minneapolis. Private connectivity options are available. |
| Power Cost | $0.08/kWh – as of May 2025 | Significantly below the US national average, ideal for dense deployments. |
| Disaster Risk | Moderate (71.78) – as of September 2025 | Primary risks are weather-related, such as winter storms and high winds. |
| Tax Incentives | Yes | Sales and use tax exemptions available for qualified data center equipment. |
| Sales Tax | 5.00% – as of September 2025 | Base state rate; local taxes may also apply. |
Network & Connectivity Ecosystem
North Dakota is an emerging market focused on providing cost-effective infrastructure rather than ultra-low latency connectivity.
Carrier Density & Carrier Neutrality: The market is developing, with a limited number of facilities and providers available as of September 2025. Connectivity is sufficient for enterprise and high-performance computing needs but does not offer the dense ecosystem of a primary interconnection hub.
Direct Cloud On-Ramps: There are no native public cloud on-ramps within North Dakota. Access to cloud providers requires network connections to major hubs like Minneapolis, typically established via private network interconnects (PNI) or dedicated wavelength circuits.
Internet Exchange Points (IXPs): Public IXPs are not present in North Dakota. Peering is typically handled privately or through carrier connections to major exchanges in Minneapolis or Chicago.
Bare Metal: Bare metal services are available from national providers, offering deployments within the state's colocation facilities. Options include providers like ColoCrossing that can place servers in regional data centers.
Power Analysis
Average Cost Of Power: The average industrial power rate is approximately $0.08/kWh, as of May 2025. This rate is among the lowest in the United States, offering substantial operational savings for high-density computing. The state's power mix is dominated by coal (55%) and wind (36%).
Power Grid Reliability: The state's power grid is reliable, supported by a significant local energy generation portfolio. The infrastructure is well-maintained to handle industrial loads and severe weather conditions common to the region.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in North Dakota serve key business hubs like Fargo and Bismarck. These facilities support the state's primary industries, including agriculture, energy, and a growing unmanned aircraft systems (UAS) sector.
Regional Market Reach: The state serves as a strategic location for workloads targeting the Upper Midwest and central Canadian provinces like Manitoba and Saskatchewan. It is best suited for applications that are not latency-sensitive.
Tax Advantage For Data Centers: North Dakota provides a significant financial advantage through a sales and use tax exemption for qualified data center operators. This incentive lowers the upfront capital cost of building or expanding infrastructure by removing the tax burden on essential equipment and construction materials.
Natural Disaster Risk
North Dakota has a Moderate natural disaster risk profile, with a National Risk Index score of 71.78 as of September 2025. The risk profile is free from major seismic or hurricane threats. Primary threats are weather-related and include severe winter weather (ice storms, cold waves), tornadoes, strong winds, and hail.
