Data Centers in Tennessee

Tennessee – Strategic Hub for Resilient Infrastructure

Tennessee serves as a cornerstone for organizations requiring high uptime and a predictable fiscal environment in the Southeastern United States. With dense clusters in Nashville and Memphis, the state offers a balance of geographic stability and operational savings that improves bottom-line performance for enterprise infrastructure. This market is a top choice for healthcare, finance, and logistics firms prioritizing low-latency regional access.

Tennessee: At A Glance

Network & Connectivity Ecosystem

Carrier Density & Carrier Neutrality: Carrier count: over 22, as of September 2025. The market features a healthy mix of Tier 1 providers and regional fiber networks, ensuring competitive pricing and diverse routing for critical applications. Nashville and Memphis operate as the primary interconnection points, supporting over 25 data centers statewide.

Direct Cloud On-Ramps: Over 0, enabling access to 0 cloud regions, as of September 2025. While native on-ramps for AWS or Google Cloud (GCP) are not physically located within the state, dedicated transport to Atlanta provides reliable, low-latency access to major cloud availability zones.

Internet Exchange Points (IXPs): Peering primarily occurs through private interconnects or via the Nashville Internet Exchange. These facilities facilitate efficient local traffic exchange and reduce latency for regional users and service providers.

Bare Metal: Bare metal services are available through providers such as Hivelocity and phoenixNAP, as of September 2025. these options support automated infrastructure deployments for specialized workloads without the overhead of virtualization.

Power Analysis

Average Cost Of Power: Industrial electricity is approximately $0.06 – $0.08/kWh, as of September 2025. The energy mix is stable, led by nuclear power at 48% and natural gas at 29%, providing a predictable cost structure for high-density colocation. This competitive pricing directly reduces the total cost of ownership for large-scale deployments.

Power Grid Reliability: The grid is managed by systems that use multi-substation support to maintain consistent service. Redundancy is a standard feature for the infrastructure corridors serving the Nashville and Memphis markets, ensuring resilient operations for enterprise tenants.

Market Access, Business & Tax Climate

Proximity To Key Business Districts: Data centers are located near the healthcare, finance, and logistics hubs of Nashville and Memphis. This proximity is vital for low-latency internal processing and real-time data management for regional corporate headquarters.

Regional Market Reach: Tennessee is centrally located to serve over half of the United States population within a single day of transit. This positioning makes it a strong choice for content delivery and regional edge computing requirements across the Southeast and Midwest.

Tax Advantage For Data Centers: The state offers significant financial benefits through sales tax exemptions on qualified data center equipment and purchases. This incentive helps operators and tenants manage long-term capital expenses effectively while modernizing their hardware stacks.

Natural Disaster Risk

Tennessee carries a High risk rating with a FEMA National Risk Index score of 79.70, as of September 2025. While the state is inland, facility engineering must account for specific regional environmental challenges to ensure continuous operation.

The primary natural hazards include:

• Tornadoes and Strong Winds
• Riverine Flooding
• Earthquakes
• Severe Thunderstorms and Lightning
• Extreme Heat Waves
• Winter Weather and Ice Storms