Data Centers in North Dakota
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North Dakota – Low-Cost Power & Tax Incentives
Executive Summary
North Dakota is a strategic market for businesses with power-intensive computing needs, such as high-performance computing (HPC) or cryptocurrency mining. The state combines some of the lowest industrial power rates in the United States with specific data center tax exemptions, creating a compelling financial case for large-scale deployments. This focus on operational efficiency allows companies to maximize compute capacity per dollar spent.
North Dakota: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | A developing market with connectivity concentrated in its primary cities. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest on-ramp hubs are Minneapolis and Denver; access via private network extensions. |
| Power Cost | $0.08/kWh | Industrial rate, as of May 2025. One of the lowest in the nation. |
| Disaster Risk | Moderate (NRI Score: 71.78) | Low exposure to major seismic or hurricane events. Main risks are weather-related. |
| Tax Incentives | Yes | Qualified data centers receive sales and use tax exemptions on equipment and construction. |
| Sales Tax | 5.00% | State base rate, as of September 2025. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: The carrier ecosystem is developing, with at least 1 provider offering services across 2 data centers as of September 2025. Connectivity is primarily concentrated in the Fargo and Bismarck metro areas, with services available from national and regional network providers.
Direct Cloud On-Ramps: There are no direct cloud on-ramps in North Dakota. Businesses connect to cloud providers like AWS, Google Cloud, and Microsoft Azure through the nearest major hubs, primarily Minneapolis. Access is typically achieved using dedicated wavelength or Ethernet private line services from network carriers.
Internet Exchange Points (IXPs): Public internet exchanges are not established within North Dakota. Most peering is conducted privately between carriers or routed through major interconnection hubs like the Minnesota Internet Cooperative Exchange (MICE) in Minneapolis.
Bare Metal: Bare metal server availability is primarily through national providers that can deploy infrastructure into the region. Providers like ColoCrossing offer services suitable for this market.
Power Analysis
Average Cost Of Power: North Dakota offers one of the most competitive power markets in the country, with an industrial electricity rate of approximately $0.08/kWh as of May 2025. This extremely low cost provides a significant operational expense advantage for high-density workloads. The grid is supplied by a mix of coal (55%) and wind (36%).
Power Grid Reliability: The state's power grid is well-engineered, benefiting from a robust local energy production sector. The infrastructure is designed to handle harsh weather conditions, providing reliable service for mission-critical facilities.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in North Dakota serve the primary economic centers of Fargo and Bismarck. These facilities support key local industries, including agriculture, energy, unmanned aircraft systems (UAS) development, and growing software companies.
Regional Market Reach: The state is well-positioned to serve the Upper Midwest region of the United States and the central Canadian provinces of Manitoba and Saskatchewan. It provides a low-latency option for applications serving this broad geographic area.
Tax Advantage For Data Centers: North Dakota offers a significant financial benefit through a sales and use tax exemption for qualified data centers. This incentive applies to the purchase of computer equipment, software, and construction materials, directly lowering the capital expenditure required for new builds or facility upgrades.
Natural Disaster Risk
North Dakota has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 71.78 as of September 2025. The state is not exposed to major seismic activity, hurricanes, or coastal flooding. The primary risks are weather-related and include tornadoes, severe winter weather and ice storms, strong wind events, and drought.
