United States Data Center Colocation Databook Report 2026: $72.37 Bn Market Led by Equinix and Digital Realty as QTS, Iron Mountain and AI Developers Accelerate Capacity Expansion - Forecast to 2030

The US colocation market shows strong growth opportunities, driven by AI and hybrid cloud adoption, with demand for high-density, AI-ready facilities outpacing supply. Power shortages are shifting development to new markets, enhancing secondary location appeal. Key areas of focus include power density, cooling, and managed services.

U.S. Data Center Colocation Market

Dublin, April 30, 2026 (GLOBE NEWSWIRE) -- The "United States Data Center Colocation Market Size and Forecast by Revenue, Capacity, and 70+ Performance Metrics Across Service Type, Facility Architecture, Customer Segment, AI and Non AI Workloads, End Use Sector, Capacity Pipeline and Financial Metrics Databook Q2 2026 Update" report has been added to ResearchAndMarkets.com's offering.

The United States data center colocation market is expected to grow by 16.5% on an annual basis to reach US$46.84 billion in 2026. The colocation market in United States has demonstrated consistent expansion during 2021-2025, recording a CAGR of 15.2%. This growth momentum is accelerate over the forecast period, with the market projected to register a 11.5% from 2026-2030. By the end of 2030, the colocation market is anticipated to expand from US$40.21 billion in 2025 to approximately US$72.37 billion.

The US colo market is defined by a tension between historically high demand driven by AI infrastructure build-out and enterprise hybrid IT, and supply constraints anchored in power access and permitting timelines. Established operators with secured power capacity in primary and emerging secondary markets hold a structural advantage. The competitive landscape is consolidating around scale, AI-readiness, and sustainability credentials, while infrastructure constraints are redistributing investment away from saturated primary markets. Power pipeline and grid access are the primary determinants of long-term viability for operators in this market.

The US colocation market in 2025 is the largest globally by installed capacity and investment volume. Northern Virginia remains the highest-density colo market worldwide, with Chicago, Dallas, Silicon Valley, and New York as secondary hubs. Vacancy rates in primary markets have tightened, with available powered shell space in Northern Virginia below 5% as of early 2025. Wholesale colo, particularly for hyperscaler and AI tenants, accounts for the majority of new leasing volume.

Equinix and Digital Realty maintain dominant positions in retail and wholesale colo respectively. Iron Mountain has expanded its colo footprint through continued development in Phoenix and Denver. QTS (Blackstone) is scaling hyperscale-focused campuses in Ashburn, Richmond, and new secondary markets. CoreSite operates in major metro markets with strong enterprise and network-dense positioning. AI-focused colo developers such as Applied Digital and Vantage Data Centers are scaling rapidly with financing from institutional capital.

Key Trends and Growth Drivers

AI Workload Demand Reshapes Colo Capacity Requirements

• Hyperscalers and AI-native companies are driving a sharp shift in the type of capacity demanded from US colo providers. In 2025, facilities capable of supporting high-density compute racks (30kW and above per rack) are in short supply across Northern Virginia, Silicon Valley, and Chicago. Equinix and Digital Realty have both announced high-density expansions in these corridors to accommodate GPU-intensive workloads from tenants such as CoreWeave and Lambda Labs.

• The scaling of large language model training and inference infrastructure requires power and cooling densities that legacy colo builds cannot support. Liquid cooling adoption, including direct liquid cooling and immersion cooling, is accelerating among US colo operators to meet these requirements.

• Demand for AI-ready colo capacity will intensify. Providers unable to retrofit or build for high-density will face tenant churn. Differentiation will shift from connectivity and location to power density and cooling capability.

Power Scarcity Concentrates Development in New Markets

• Power constraints in established US colo markets, particularly Northern Virginia (Loudoun County), are redirecting investment to secondary markets. In 2025, Columbus (Ohio), San Antonio, and Boise have seen increased land acquisition and permitting activity from major colo developers including QTS Realty and Iron Mountain.

• Dominion Energy's moratorium on new large power connections in Northern Virginia, combined with extended utility interconnection queues nationally, is forcing operators to look beyond primary markets. State-level incentives in Ohio, Texas, and Idaho are reinforcing this shift.

• Secondary US markets will gain disproportionate share of new colo supply. Primary markets will see rising lease rates due to constrained new supply, benefiting existing operators with built-out capacity.

Enterprise Colocation Demand Grows as Cloud Repatriation Continues

• A portion of US enterprises that migrated workloads to public cloud are selectively returning compute and storage to colo environments on cost and control grounds. In 2025, financial services firms and healthcare providers are among the most active segments executing hybrid IT strategies anchored in colo. Colo providers including Flexential and Evoque Data Centre Solutions are actively marketing to enterprise repatriation use cases.

• Predictable pricing, data residency requirements, and total cost of ownership comparisons are driving this recalibration.

• Enterprise colo demand will provide a stable demand floor. Providers with strong managed services capabilities layered on colo infrastructure will capture higher-value contracts.

Infrastructure & Regulatory Environment

Power Grid Access and Energy Mix

• The US power grid presents an uneven landscape for colo development. PJM Interconnection, which covers the critical Northern Virginia market, has a multi-year interconnection queue backlog extending to 2030 in some areas. Texas (ERCOT) offers faster interconnection timelines but carries grid reliability risks. Renewable energy procurement is a competitive priority; Equinix, Digital Realty, and QTS have all made commitments to 100% renewable energy matching in the US market, primarily through power purchase agreements and renewable energy certificates.

Government Policy and Data Localization

• The US does not impose data localization requirements at the federal level, making it a relatively open market for cross-border data flows. Sector-specific regulations (HIPAA for healthcare, GLBA for financial services) create compliance-driven demand for domestic colo. In 2025, the federal government's focus on AI infrastructure has translated into incentive discussions for domestic AI compute infrastructure.

Barriers to Expansion

• Power availability and skilled labor are the primary barriers. Utility upgrade lead times of 3-5 years in constrained markets extend development timelines significantly. Permitting and community opposition in Loudoun County, Virginia, have added friction to new development approvals. Water usage for cooling is an increasing point of regulatory and community scrutiny in water-stressed Western states.

Key Attributes:

For more information about this report visit https://www.researchandmarkets.com/r/drrrxd

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

Attachment

• U.S. Data Center Colocation Market

CONTACT: CONTACT: ResearchAndMarkets.com Laura Wood,Senior Press Manager [email protected] For E.S.T Office Hours Call 1-917-300-0470 For U.S./ CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900