Ashburn vs. Dallas: Where Hyperscalers Are Heading in 2025

In the digital age, hyperscale data centers are the backbone of everything from AI workloads and cloud computing to video streaming and enterprise SaaS. And in the United States, two cities have emerged as dominant contenders in the race for hyperscaler investment: Ashburn, Virginia—nicknamed “Data Center Alley”—and Dallas–Fort Worth, Texas, a rising star in the world of large-scale infrastructure. 

As we step into 2025, the competition between Ashburn and Dallas has intensified. Hyperscale operators are making high-stakes decisions on where to build next, and both metros offer unique advantages. This blog explores the evolving data center dynamics of each region, compares their strengths and challenges, and analyzes where hyperscalers are likely to expand their footprints in the years ahead. 

The Hyperscale Surge: What’s Fueling the Growth? 

Hyperscale data centers are facilities purpose-built to support massive volumes of compute, storage, and network demand. They are typically used by cloud providers like Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform, Meta, and Oracle. 

What’s Driving Hyperscale Demand in 2025: 

• AI Training Workloads: Large language models (LLMs), generative AI, and inference engines require GPU-intensive clusters 
• Global Content Delivery: Video, gaming, and immersive content need lower latency and broader geographic coverage 
• Hybrid Multicloud Strategies: Enterprises are demanding high-density colocation with cloud interconnectivity 
• Data Sovereignty and Compliance: Organizations are seeking regional hosting to meet regulatory obligations 

With projected global hyperscale capacity to exceed 1,300 facilities by 2026, the stakes for site selection have never been higher. 

Ashburn, VA: The Reigning Champion 

Ashburn, located in Loudoun County, Virginia, has long been considered the epicenter of the global data center industry. 

Key Strengths: 

1. Network Proximity 

Ashburn is the home of MAE-East, one of the original internet exchange points. It boasts: 

• Dense fiber interconnectivity 
• Access to 70%+ of global internet traffic routes 
• Proximity to Washington, D.C. for federal cloud contracts 

2. Established Ecosystem 

The region offers: 

• Over 35 million square feet of data center space 
• Dozens of hyperscale campuses from Digital Realty, Equinix, Vantage, and Amazon 
• Highly experienced workforce and construction ecosystem 

3. Energy Reliability 

Dominion Energy has historically provided stable grid access, though future capacity concerns are rising. 

Challenges in 2025: 

• Power Permitting Delays: Loudoun County is grappling with power grid constraints and a backlog in substation approvals 
• Land Scarcity: Prime development parcels are limited, pushing projects westward into Prince William and Culpeper Counties 
• Rising Costs: Land, labor, and energy rates have steadily increased due to saturation 

Despite these challenges, Ashburn remains a tier-one location for hyperscale activity—but it may not be the easiest or cheapest option anymore.

Dallas–Fort Worth, TX: The Challenger on the Rise 

The Dallas–Fort Worth metroplex has emerged as a serious contender in hyperscale development, particularly in 2023–2025. 

Key Strengths: 

1. Abundant Land and Power 

Texas offers: 

• Ample zoned land suitable for multi-hundred-megawatt campuses 
• Energy market flexibility via ERCOT (Electric Reliability Council of Texas) 
• Competitive power pricing and growing renewable integration 

2. Logistics and Workforce 

DFW is: 

• Centrally located with strong national fiber backbones 
• Home to a large skilled labor force, including construction and MEP trades 
• Already a hub for corporate cloud, finance, and logistics firms 

3. Pro-Business Climate 

• Tax incentives, fast-track permitting, and limited regulation attract hyperscaler investment 
• Local governments actively support data center development with infrastructure planning 

Challenges in 2025: 

• Grid Reliability: ERCOT has faced scrutiny over resilience during extreme weather events 
• Cooling and Water Concerns: As data centers expand, access to sustainable cooling methods (especially in summer) is under pressure 
• Public Perception: In some counties, data centers face opposition over environmental and land use concerns 

Even so, DFW has positioned itself as a cost-effective, scalable alternative to traditional Tier I markets. 

Ashburn vs. Dallas: Data Center Comparison by the Numbers

When evaluating the top data center markets in the United States, Ashburn, Virginia and Dallas–Fort Worth, Texasconsistently emerge as industry giants. Here's how these two powerhouse regions stack up across key metrics:

1. Data Center Capacity

• Ashburn boasts approximately 2,500 megawatts (MW) of data center capacity, making it the largest and most concentrated data center market in the world.
• Dallas–Fort Worth trails slightly behind with around 1,400 MW, but is experiencing rapid infrastructure expansion, closing the gap quickly.

2. Growth Rate (2022–2025)

• Ashburn is growing at a healthy pace, with an estimated 12% annual growth in capacity.
• Dallas is accelerating even faster, with a projected 21% annual growth, driven by land availability, lower costs, and enterprise demand.

3. Average Power Costs

• In Ashburn, power rates typically range from $0.06 to $0.08 per kilowatt-hour (kWh)—reasonable by East Coast standards but higher than central markets.
• Dallas offers more cost-effective power, with average rates between $0.04 and $0.06/kWh, making it an attractive location for energy-intensive deployments.

4. Land Availability

• Ashburn faces significant land constraints, with much of the region already built out or zoned for specific uses, driving up real estate costs.
• Dallas benefits from abundant land, offering flexibility for greenfield development and large-scale campus builds.

5. Fiber Connectivity

• Ashburn has extremely dense fiber infrastructure, with hundreds of carriers and interconnection points converging in what’s often called “Data Center Alley.”
• Dallas’s fiber access is growing rapidly, with major national backbones and subsea cable routes extending into the region, increasing its appeal for latency-sensitive workloads.

6. Presence of Major Hyperscalers

• In Ashburn, you’ll find major deployments from Amazon Web Services (AWS), Meta (Facebook), Google, and Microsoft—many operating multiple large-scale campuses.
• Dallas is equally competitive, hosting data centers for Google, Oracle, Microsoft, Meta, and AWS, with Oracle’s presence being a notable differentiator.

What Hyperscalers Are Doing in 2025 

Amazon Web Services (AWS) 

• Continuing to expand in Northern Virginia, but also increasing investment in south Dallas with modular, water-efficient campuses 

Google Cloud 

• Focused on carbon-free energy goals; expanding in both markets, with Dallas favored for solar capacity 

Microsoft 

• Deploying AI-specific zones in Ashburn and San Antonio, integrating with Azure OpenAI workloads 

Meta 

• Scaling new campuses in North Texas with high-performance data hall designs 

Oracle and IBM 

• Building multi-cloud regions in Dallas to support public and hybrid cloud for enterprise and government clients 

Hyperscalers are increasingly adopting a multi-region, workload-specific deployment strategy, using Ashburn for compliance-sensitive or latency-critical workloads and Dallas for scalability and AI GPU clusters. 

The Role of AI and Edge Computing 

AI is reshaping the requirements of data centers: 

• GPU clusters demand denser power and advanced cooling 
• AI model training benefits from modular, scalable capacity with low power latency 

Both Ashburn and Dallas are adapting: 

• Ashburn is layering liquid cooling and direct-to-chip architectures into new builds 
• Dallas is prioritizing AI-ready zoning and AI cluster leasing models 

Meanwhile, edge computing is creating demand for satellite facilities in surrounding regions: 

• From Ashburn: deployments into Baltimore, Richmond, and suburban DC 
• From Dallas: extensions into Austin, Houston, and the I-35 corridor 

Sustainability and Environmental Factors 

Sustainability is now a primary factor in hyperscaler expansion. 

Ashburn: 

• New builds are pursuing LEED Platinum and carbon-neutral certifications 
• Constraints around water usage and grid impact are prompting innovation 

Dallas: 

• More access to solar and wind power through ERCOT 
• New campuses are experimenting with dry cooling, biodiversity offsets, and battery storage systems 

Public scrutiny and ESG reporting requirements mean that site selection must now align with climate resilience and energy transparency. 

Policy, Incentives, and Regulation 

Both Virginia and Texas offer incentive programs for data center development, including: 

• Sales and use tax exemptions 
• Fast-track permitting 
• Infrastructure development grants 

Virginia’s programs are mature and stable, while Texas is introducing performance-based incentives tailored to hyperscale employment and sustainability goals. 

In 2025, companies are also evaluating cybersecurity and data localization laws, favoring states with clear, business-friendly statutes that support multitenant and hybrid cloud models. 

The Verdict: Where Hyperscalers Are Headed Next 

So, which region is winning in 2025? 

• Ashburn remains the gold standard for hyperscale network access and compliance-ready workloads. 
• Dallas is emerging as the go-to market for cost-effective scaling, AI model training, and energy-forward innovation. 

The answer isn’t either/or—it’s both. Hyperscalers are increasingly pursuing dual-region strategies: 

• Latency-critical and government workloads in Ashburn 
• GPU-intensive, high-growth, and AI workloads in Dallas 

Additionally, secondary markets surrounding both cities—such as Richmond, Austin, and Oklahoma City—are poised to support spillover capacity. 

The hyperscale data center industry is evolving rapidly, and Ashburn and Dallas are leading the charge in different ways. In 2025, hyperscalers are no longer choosing a single base of operations. Instead, they’re deploying strategically across multiple markets, balancing proximity, cost, scalability, and sustainability. 

For investors, operators, and enterprises, understanding the distinct advantages of each region is crucial. Ashburn offers network density and regulatory trust. Dallas offers room to grow and a forward-looking infrastructure strategy. 

In the years ahead, the Ashburn–Dallas corridor may become not a rivalry—but a blueprint for the next generation of AI-ready, carbon-conscious, globally connected digital infrastructure.