Data Centers in Fargo
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Fargo – Low-Cost Power in a Low-Risk Location
Fargo, North Dakota offers a compelling environment for workloads that require low-cost, reliable power and minimal exposure to natural disasters. It is an ideal secondary market for businesses focused on operational resilience, data backup, and disaster recovery without the high costs of primary coastal hubs. The market's aggressive tax incentives further enhance its financial appeal for long-term data center investments.
Fargo: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Solid regional connectivity, suitable for many standard enterprise applications. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Nearest major cloud hubs are in Minneapolis. Private network extensions are available. |
| Power Cost | $0.08/kWh – as of May 2025 | Very competitive industrial rates, significantly below the national average. |
| Disaster Risk | Moderate (71.78) – as of September 2025 | Low exposure to major seismic or hurricane events common in other US regions. |
| Tax Incentives | Yes | Qualified data centers receive sales and use tax exemptions on equipment and construction. |
| Sales Tax | 5.00% (North Dakota) – as of September 2025 | The state's base rate is among the lower in the nation. |
Network & Connectivity Ecosystem
Fargo is a regional connectivity hub with a focused but capable network ecosystem. While it does not compete with major markets like Chicago or Minneapolis on raw carrier count, it provides reliable infrastructure for most business needs.
Carrier Density & Carrier Neutrality: The Fargo market includes 1 provider across 2 data centers as of September 2025. The environment supports carrier-neutral interconnection, allowing customers to choose from available local and regional network providers.
Direct Cloud On-Ramps: There are no direct public cloud on-ramps within Fargo as of September 2025. Businesses connect to major cloud providers like AWS, Google Cloud, and Microsoft Azure via the nearest interconnection hub in Minneapolis, accessible through private network links and wavelength services.
Internet Exchange Points (IXPs): Public peering is limited within Fargo itself. Most traffic exchange occurs privately between carriers or is routed through the MICE internet exchange in Minneapolis to connect with national and international networks.
Bare Metal: Bare metal server options are available in the region, providing dedicated compute resources. Providers like ColoCrossing offer solutions suitable for performance-sensitive applications.
Power Analysis
North Dakota's power infrastructure is a primary advantage for data center operators, offering some of the most affordable and reliable electricity in the United States.
Average Cost Of Power: The average industrial electricity rate is approximately $0.08/kWh as of May 2025. This extremely competitive pricing can significantly lower the total cost of ownership for high-density deployments. The grid benefits from a diverse mix, with 55% from coal and 36% from wind.
Power Grid Reliability: The regional power grid is well-engineered and stable. Data centers in the area are typically supported by redundant power feeds from separate substations, ensuring high levels of uptime for critical operations.
Market Access, Business & Tax Climate
Fargo provides strategic access to the Upper Midwest and benefits from a highly favorable business and tax environment designed to attract technology investment.
Proximity To Key Business Districts: Data centers in Fargo serve the city's growing technology, healthcare, and manufacturing sectors. The market is centrally located to support local enterprises and educational institutions like North Dakota State University.
Regional Market Reach: From Fargo, businesses can effectively serve end-users across North Dakota, South Dakota, Minnesota, and parts of southern Canada. Its location makes it a logical hub for content delivery and application hosting for this geographic area.
Tax Advantage For Data Centers: North Dakota offers one of the most attractive tax incentive programs in the country. A specific sales and use tax exemption on qualified data center equipment, software, and construction costs provides a direct and substantial financial benefit, reducing capital expenditures for new builds and major expansions.
Natural Disaster Risk
Fargo has a moderate natural disaster risk profile, with a FEMA National Risk Index score of 71.78 out of 100 as of September 2025. The location avoids the high-impact threats like hurricanes, earthquakes, and major coastal flooding that affect other US data center markets.
The primary environmental risks to consider are severe winter weather, strong wind, tornadoes, and hail. Other notable risks include drought, heatwaves, and lightning. Careful facility engineering and operational planning are sufficient to mitigate these regional hazards.
