The Heartland's Unexpected Boom
If someone had told you five years ago that Indiana would become one of the hottest data center construction markets in the country, you would have been skeptical. Data centers were a Virginia-and-a-few-others business, and the Midwest was not on anyone's shortlist. But here we are: Microsoft is building a $3.3 billion campus in Indiana, Google has committed $2 billion to Fort Wayne, and data center projects are breaking ground across Ohio, Illinois, and Iowa at a pace that has surprised even industry veterans.
The Midwest data center boom is not an accident. It is the predictable result of fundamental constraints in traditional markets — primarily power availability in Virginia and land costs in established Sun Belt hubs — colliding with the Midwest's inherent advantages: cheap and abundant electricity, available land, reasonable permitting timelines, and a workforce that, while not experienced in data center construction specifically, has deep industrial construction roots.
For construction firms in the Midwest, this represents a once-in-a-generation opportunity. These are among the largest construction projects ever built in their markets, and the operators behind them are committed to multi-year, multi-phase buildouts that will create sustained demand for years to come. For firms outside the Midwest that are willing to follow the work, the region offers a less competitive landscape than Virginia or Texas.
This article maps the major data center construction projects underway across the Midwest, examines the economic and technical factors driving the region's emergence, and assesses what this means for the construction industry.
Indiana — From Nowhere to Everywhere
Indiana's data center story is remarkable in its speed and scale. The state went from essentially zero hyperscale data center presence to hosting two of the largest data center construction projects in the country in less than three years.
Microsoft's $3.3 Billion Campus
The centerpiece of Indiana's data center boom is Microsoft's $3.3 billion campus near Indianapolis. Announced in 2024 and now in active construction, the project will deliver over 400 megawatts of IT capacity across multiple buildings when fully built out.
The project's scale is difficult to convey without comparison. At $3.3 billion, it is larger than most sports stadiums, larger than all but the most massive hospital complexes, and roughly equivalent to a small city's entire annual construction output. At peak construction, the campus will employ 2,000 to 3,000 workers — a significant number even in a metro area the size of Indianapolis (population approximately 2.1 million).
Microsoft selected Indiana for several reasons. First, Indianapolis Gas & Electric and Duke Energy Indiana can provide firm power commitments on timelines measured in months, not the 3 to 7 years that Dominion Energy requires in Virginia. Second, Indiana's electricity rates for large industrial customers average $0.08 to $0.10 per kilowatt-hour, significantly below Virginia and comparable to Texas. Third, Indiana's state government offered an aggressive incentive package that reportedly includes property tax abatements, infrastructure cost-sharing, and workforce development funding. Fourth, Indiana's central location provides low-latency connectivity to major population centers in the eastern and central United States.
The construction program is being executed by a team that includes national data center-experienced GCs supported by local subcontractors. Microsoft has made a deliberate effort to engage local and regional contractors, both because it is good community relations and because importing all workers from out of state would be prohibitively expensive and logistically difficult.
Google's $2 Billion Fort Wayne Investment
Google's $2 billion data center investment in Fort Wayne represents another massive project for Indiana. Located approximately 125 miles northeast of Indianapolis, the Fort Wayne campus will serve Google's cloud and AI computing platforms.
Fort Wayne (metro population approximately 425,000) is a significantly smaller market than Indianapolis, which creates both advantages and challenges. The advantages include lower land costs, less construction congestion, and an enthusiastic local government. The challenges include a smaller local construction workforce and less developed infrastructure.
Google has worked closely with Fort Wayne's local utilities and construction community to prepare for the project, including investments in electrical infrastructure upgrades and workforce training programs at local community colleges.
State-Level Support
Indiana's state government has been highly supportive of data center development, viewing it as part of a broader economic development strategy to attract technology investment to the state. The Indiana Economic Development Corporation (IEDC) has offered significant incentive packages to data center operators, including:
- Property tax abatements of up to 100 percent for up to 20 years on qualifying real property improvements
- Personal property tax exemptions for data center equipment
- Training grants through the state's Skills Enhancement Fund
- Infrastructure assistance through the state's READI (Regional Economic Acceleration and Development Initiative) program
These incentives, combined with the state's fundamental cost advantages, have made Indiana one of the most competitive data center locations in the country.
Ohio — Steady and Strategic
Ohio's data center market is more established than Indiana's, with Amazon Web Services operating significant facilities in the Columbus area for several years. But the pace of growth has accelerated dramatically, driven by the same factors pushing development into Indiana and other Midwest markets.
Columbus Area
The Columbus area remains the center of Ohio's data center market, leveraging the city's central location, competitive electricity rates (approximately $0.07 to $0.09 per kWh for large industrial customers from AEP Ohio and Columbus Southern Power), and the presence of multiple fiber routes.
Amazon's Columbus-area campuses represent the largest existing data center presence in Ohio, with multiple facilities totaling hundreds of megawatts of IT capacity. The company continues to expand, with new buildings under construction and additional phases in permitting.
New Albany
New Albany, a suburb northeast of Columbus, has emerged as a particularly active data center market. The community's New Albany International Business Park has attracted interest from multiple data center operators, including Google and Meta, both of which have explored campus-scale developments in the area.
New Albany's appeal lies in its combination of available land (the business park encompasses thousands of acres), willing utility (AEP Ohio has proactively invested in substation and distribution capacity), and supportive local government that has streamlined permitting for data center projects.
Google and Meta Exploration
Both Google and Meta have been actively evaluating Ohio for significant data center investments. While formal announcements have been measured, permit filings and land acquisitions suggest that both companies are moving forward with projects in the Columbus area that could rival the scale of their investments in other states.
Tax Incentives
Ohio's data center-specific tax incentive program, enacted in 2022, provides tangible benefits. Qualifying data center projects receive exemptions from sales and use tax on equipment purchases and may receive property tax exemptions through local agreements. The state's Job Creation Tax Credit program can also benefit data center operators, though the relatively small number of permanent jobs created by data centers (compared to manufacturing) limits the value of employment-based incentives.
Illinois — Chicago's Persistent Appeal
Illinois, and specifically the Chicago area, has maintained a steady data center market that benefits from the city's role as a major network hub and financial center. The Chicago area hosts significant data center operations from Equinix, Digital Realty, QTS, and others, centered on the downtown area (for financial services) and suburban locations (for hyperscale and cloud operations).
Current Construction
Digital Realty's expansion in the Chicago suburbs continues with new buildings in Elk Grove Village and Franklin Park. These facilities target the enterprise and cloud computing markets and represent steady, if not spectacular, growth.
Several new entrants have also announced Chicago-area projects, attracted by the city's connectivity advantages and the relatively deep local construction workforce.
Constraints
Illinois faces several challenges as a data center market. Electricity rates are higher than Indiana, Ohio, and most Texas markets, driven in part by the state's renewable energy mandates and grid infrastructure costs. Land costs in the Chicago suburbs are significantly higher than in Indiana or Ohio. And the state's regulatory environment, while not hostile to data centers, lacks the aggressive incentive programs offered by competing states.
These factors suggest that Illinois will remain a solid but not spectacular data center market, growing steadily but unlikely to attract the kind of transformative investments that Indiana and Ohio are landing.
Iowa — The Quiet Achiever
Iowa deserves mention in any discussion of Midwest data center construction. The state hosts major facilities from Google (Council Bluffs), Microsoft (West Des Moines), and Meta (Altoona), and continues to attract investment.
Iowa's advantages are simple: some of the cheapest electricity in the country (averaging $0.06 to $0.08 per kWh), abundant wind energy generation (Iowa leads the nation in percentage of electricity from wind), cool climate that reduces cooling costs, and a state government that has actively courted data center investment.
Meta's Altoona campus is one of the company's largest facilities globally, and continued expansion there represents a significant ongoing construction program. Microsoft's West Des Moines campus is similarly active.
For contractors, Iowa's data center market is significant but geographically limited to a few locations. The construction demand associated with these projects is intense but concentrated, creating localized labor shortages that are particularly challenging given Iowa's smaller population.
Why the Midwest Works for Data Centers
The Midwest's emergence as a data center construction hotspot is driven by several structural factors that are unlikely to change in the near term.
Power Availability
The single most important factor is power. Midwest utilities — Duke Energy Indiana, AEP Ohio, Indianapolis Power & Light, MidAmerican Energy — can provide firm power commitments in months, compared to the years-long wait in Virginia. These utilities also have significant reserve capacity, partly because the Midwest's manufacturing base (a historically large electricity consumer) has shrunk over the past two decades, freeing up generation and transmission capacity.
Electricity Cost
Midwest electricity rates for large industrial customers generally range from $0.06 to $0.10 per kWh, which is 20 to 40 percent below rates in Virginia and comparable to or slightly above rates in the cheapest Texas markets. For a 200-megawatt data center consuming electricity 24/7, this cost difference translates into $10 million to $30 million in annual savings.
Land Availability
Land costs in Midwest data center markets are a fraction of what they are in Virginia or the established Texas suburbs. Farmland and ex-industrial sites suitable for data center development are available at $50,000 to $150,000 per acre in many Midwest locations, compared to $500,000 to $2 million per acre in Northern Virginia.
Construction Cost
Overall construction costs in the Midwest are generally 10 to 20 percent below Virginia and 5 to 15 percent below major Texas markets. Labor rates for electricians, pipefitters, and other key trades are lower (though rising as data center demand increases), and general conditions costs are reduced by the less complex regulatory environment.
Central Location
For operators serving a national customer base, the Midwest's central geographic location provides latency advantages compared to building exclusively on the coasts. A data center in Indianapolis or Columbus can serve users in the eastern U.S., the Southeast, and the central states with low latency, reducing the need for redundant facilities in multiple regions.
The Construction Workforce Question
The Midwest's data center boom is creating significant demand for construction workers in markets that have not historically supported this type of specialized work. The key question is whether the region's existing construction workforce can be trained and redeployed for data center projects quickly enough to keep pace with the construction pipeline.
The good news is that the Midwest has a deep bench of industrial construction workers — electricians, pipefitters, iron workers, and operators — with experience in manufacturing, power plant, and heavy industrial construction. Many of the skills required for data center work (medium-voltage electrical systems, large-diameter piping, heavy concrete work) are transferable from industrial construction with targeted retraining.
The challenge is that retraining takes time, and the data center projects are starting now. This creates a near-term dependency on traveling workers from data center-experienced markets (primarily Virginia and Texas), which adds cost through per diem, travel, and temporary housing.
Microsoft and Google have both invested in workforce development programs in their Midwest markets, partnering with community colleges and trade unions to develop data center-specific curricula. These programs are starting to produce graduates, but the scale of output is still small relative to the demand.
For more context on the nationwide construction labor challenge, see our analysis of the construction workforce gap, which details the 501,000-worker shortfall facing the industry.
Implications for Midwest Contractors
For construction firms based in the Midwest, the data center boom represents an extraordinary opportunity. Here is how to think about it.
Get in early. The hyperscale operators are actively seeking local contractors for these projects — both because local firms offer cost advantages and because community engagement is important to the operators' site development strategies. Contractors who establish relationships now will have a significant advantage as subsequent phases are bid.
Invest in training. The transition from conventional commercial or industrial construction to data center construction requires specific training. Firms that invest in developing data center capabilities among their workforce will be more competitive for this work.
Scale up carefully. Data center projects are large and long-duration, which can strain the financial and operational capacity of mid-size regional contractors. Careful project selection, strong bonding capacity, and solid cash flow management are essential.
Look beyond the majors. While Microsoft, Google, and Meta capture the headlines, a growing number of colocation and wholesale operators are following the hyperscalers into the Midwest. These smaller projects may be better suited to regional contractors who are not yet ready to compete for $500 million hyperscale packages.
The Bottom Line
The Midwest data center surprise is not a surprise at all — it is the logical consequence of power constraints, cost pressures, and geographic diversification in the data center industry. Indiana, Ohio, Illinois, and Iowa are now established data center construction markets with multi-year pipelines of committed projects.
For the construction industry, the Midwest opportunity is real, substantial, and growing. The firms that position themselves now — through capability development, relationship building, and strategic hiring — will capture a significant share of what promises to be the most impactful construction trend to hit the Midwest since the automotive manufacturing build-out of the twentieth century.
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