Rafal Rak, Vice President of Americas Portfolio Management, Central, Digital Realty
March 26, 2025

Since the 1950s, the Dallas-Fort Worth (DFW) region has been an industry-renowned hub for its advanced technological infrastructure and innovation.

DFW’s metroplex is home to companies in technology, finance, transportation, healthcare, and manufacturing that all lean on data centers to operate in today’s connected data economy. So much so that the Dallas-Fort Worth area, which includes 131 active data centers in Dallas alone, has become an entire industry of its own, in addition to helping establish the area as a technological hub.¹

With various available industries, local and federal business incentives, and a centralized location, the DFW area has experienced great economic growth and is a hot market for the data center sector, including hyperscalers, leased data center operators, and cryptocurrency mining facilities. Let’s explore the history of technology in Dallas, Fort Worth data centers, and the state of the market in 2025.

Rise of the Dallas Tech Hub

The Dallas-Fort Worth area — also known as the Dallas Tech Hub — has a long history in technology and telecommunications that goes back to the 1950s, though the technology sector was the driving force behind the initial multi-tenant data centers. The area has since become a hotbed for data center operations across industries, primarily with tech-centric focuses, due to the growth in data center providers, interconnection, and colocation facilities — along with local initiatives.

Today, the increasing demand for cloud computing, artificial intelligence (AI), and other high-density workloads and applications fuels continued investment in the Dallas Tech Hub.

With colocation data centers in Dallas-Fort Worth, companies can quickly access IT infrastructure in a market that meets their power, workload, and location needs as they scale operations in a secure, compliant, and sustainable way.

In addition to accessible and agile IT infrastructure, Dallas-Fort Worth data centers offer benefits such as:

Time-to-power: Dallas-Fort Worth's “time-to-power” is a pivotal advantage. Thanks to established electric transmission and utility companies, DFW can transmit power to a site in 18 months — a transmission rate that rivals some of the top data center markets in Northern Virginia and Silicon Valley.¹ This significant reduction in time-to-power makes Dallas-Fort Worth an attractive option for data center operators looking to quickly deploy new facilities and companies seeking data and AI-ready architecture.

Affordability: Dallas-Fort Worth’s affordability is also a major draw, with power rates lower than those in other top markets. This is especially important as AI requirements, with their higher power needs, continue to expand. Beyond the power itself, the state of Texas waives the 6.25% state sales and use tax for electricity and equipment costs of a qualified data center for 10 or 15 years (depending on the amount of the capital investment).

Location: Dallas-Fort Worth’s strategic location and robust infrastructure also make it a key gateway for connectivity between the U.S. and Latin America. The region’s data centers facilitate rapid access to Latin American routes, enhancing its position as a central hub for communications and exchange in the South Central U.S.

Talented workforce: The Dallas Tech Hub has a growing workforce committed specifically to tech roles — with the DFW region adding 31,720 new jobs in the last five years. It’s also home to a highly educated workforce that intends to invest in the local area, with 72% of higher education students enrolled in the Dallas region saying they’ll stay and start careers here once they graduate.

Network connectivity: The Dallas-Fort Worth area also boasts a high concentration of network providers that specifically supply long-haul fiber networks. This means colocation providers can ensure their customers have access to fast, low-latency internet at scale. Over the past several years, providers like Digital Realty have worked to expand fiber network connectivity across commercial and residential areas.

Infrastructure for innovation: Dallas-Fort Worth data centers

Historically, the DFW region’s land availability and cost incentives have always made it an ideal place for data center construction. However, 2025 brings a new precedent as companies in the Dallas-Fort Worth area continue to increase their investment in AI, high-performance compute (HPC), and cloud computing technologies across all industry sectors.

Industry analysts project one of the highest compound annual growth rates among the estimated net operational space in the top markets for the Dallas-Fort Worth data center market at 28% (1,840 MW of IT power) between 2023 and 2028.¹ The growth of the colocation sector, where companies rent data center space to operate their own servers and network infrastructure, is the primary driving force behind this surge.

Yet, even with such a surge, data center providers have been able to scale with growing business in the Dallas-Fort Worth area and provide the deployment and customer-specific infrastructure to support innovation at scale. With data center colocation access, companies can quickly deploy AI and HPC workload use cases across the enterprise, regardless of location. Also, because Dallas-Fort Worth data centers have unique access to a wide variety of fiber network providers, this means companies can access high-speed connectivity to U.S. and global markets, such as Latin America.

Still, cloud computing and AI innovation inherently depend on having the right colocation provider and digital infrastructure to support high-density workloads and applications. Digital Realty, for example, which has 17 data centers in Dallas-Fort Worth to support the burgeoning tech sector, provides over 100,000 square feet of colocation space and access to over 60 network service providers at DFW17. This ensures that companies can scale as needed and stay connected across their entire business operations with lit fiber, dark fiber, wave, or Ethernet options.

DFW’s challenges and opportunities

Despite the many benefits of data center growth in Dallas-Fort Worth across industries, there are considerations for companies increasingly looking to colocate their infrastructure in Dallas: energy consumption and uptime of local power grids.

With market projections indicating nearly 1.9 GW in new capacity by 2029, energy-conscious data center providers will be top of mind for companies choosing Dallas as a landing place for colocation.² A data center provider committed to environmental, social, and governance (ESG) can offer the knowledge and expertise to sustainably grow their capacity to store, manage, process, and transfer data.

Digital Realty is committed to helping companies meet their sustainability goals, not only because it’s the right thing to do but also because it’s good business. We accomplish this by working with utility companies, project developers, and energy producers to help customers power their data centers with renewable energy sources like hydro, wind, solar, and biomass. By elevating efficiency, reducing waste, building responsibly, and powering with renewables, we lead the data center industry in reducing our environmental impact.

The future of data centers in Dallas-Fort Worth

The Dallas-Fort Worth data center market is one of the fastest-growing markets in the country — only second to Northern Virginia — with an average utilization rate of 84%.¹ Its rapid expansion is mainly credited to the large investment of companies in the area and the uptick in AI and cloud computing technology use cases. As companies experience exponential data growth in the coming years, the DFW area will need to invest in the data center capacity and computing power to support these data-intensive applications, without sacrificing uptime, performance, and sustainability while remaining compliant and secure.

Areas seeing the most investment and development include the traditional locations of Plano and Richardson, while there’s increasing growth south of downtown Dallas in Lancaster, Red Oak, and Mansfield.¹ Within the colocation market, Digital Realty, who still holds the top spot with more than 1.6 million square feet and more than 129 MW of built-out capacity in DFW, is expected add more than 125 MW of capacity by the end of 2028.¹

This rapid data center growth, along with local and statewide partnerships, will ensure that companies have access to data and AI infrastructure in the Dallas-Fort Worth area that not only suits their deployment needs in the present but also sets them up for AI innovation in the future.

Building future-ready infrastructure to drive enterprise technological innovation in Dallas-Fort Worth

Over the past several decades, the Dallas-Fort Worth area has become a hotbed of technological innovation — and it’s only going to grow as more companies delve into AI and more sustainable data center technologies.

As the world’s largest data center platform with over 300 facilities worldwide (17 of which are in the Dallas-Fort Worth area), we’re well positioned and able to support the high-density colocation and interconnectivity needs of global organizations and scale in Dallas without sacrificing business goals.

With access to Digital Realty’s PlatformDIGITAL®, companies in Dallas can:

Optimize their performance to gain a competitive advantage.
Shorten the connection time — even for high-density AI workloads.
Remain compliant.
Reduce their environmental footprint.

Learn more about Digital Realty's Dallas data centers.

FAQs

How many data centers are in Dallas?
There are 131 data centers in Dallas alone. The numbers are expected to grow with the tech industry’s expansion.

What is Dallas' main industry?
Dallas has a strong and diverse economy, with key industries including technology, healthcare, financial services, and telecommunications.

Why is Dallas a tech hub?
Long considered a tech hub, Dallas has a strong and growing technology sector, including startups, established tech companies, and tech talent.

Footnotes:

¹S&P Global, 451 Research, Dallas: Leased Datacenter Market, November, 2024.
² S&P Global, 451 Research, Dallas Leased Datacenters to Add Nearly 1.9 GW in New Capacity by 2029, December, 2024.

Dallas-Fort Worth data centers: A rising tech hub of the South