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

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

Today DFW 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.

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 dates to the 1950s. With Dallas—the Richardson area specifically—being home to the headquarters of companies like Collins Radio and Texas Instruments, the city was nicknamed the ‘electronic suburb’ and later the ‘Telecom Corridor’ in the 1980s when an influx of telecommunications firms followed suit. Companies in the Telecom Corridor included AT&T, Cisco, and Verizon.

In the 1950s Dallas was also home to the invention of the circuit computer chip, or ‘microchip’. Since then, the city of Dallas has continued to cultivate its reputation as a technology hub and has successfully attracted many large enterprises to the area. In fact, numerous enterprises have relocated their regional or national headquarters to Dallas from other parts of the country.

With this change, comes the demand for local, resilient, scalable infrastructure that meets the demands of innovative companies—supporting AI initiatives, interconnection, cloud strategies, and other high-density workloads and applications.

Challenges and Opportunities in DFW

Dallas is a thriving business hub that offers a unique blend of opportunities and challenges for large enterprises. With its business-friendly environment, strategic location, and diverse economy, the city is an attractive destination for companies looking to establish or expand their operations.

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.

Opportunities

Strategic location: It’s location and robust infrastructure 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.
Talent pool: 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.
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).
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.
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.

While Texas is generally considered business-friendly, large enterprises in Dallas may still face challenges such as regulatory complexity, which can pose operational hurdles. The Dallas market is also highly competitive, with numerous established businesses and a growing number of startups vying for market share. Furthermore, as a major business hub, Dallas is a target for cybercriminals, presenting a significant risk to businesses that handle sensitive data. These challenges require careful consideration and strategic planning to navigate successfully.

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 depends on having the right colocation provider and digital infrastructure to support high-density workloads and applications. To serve these needs, Digital Realty 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.

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. 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.

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