Once overlooked in the tech race, North Dakota and South Dakota are fast becoming pivotal players in the expansion of digital infrastructure. With an abundance of low-cost energy, stable climates, and pro-business environments, the Dakotas are making a compelling case for data center development—especially for edge computing, where location, latency, and sustainability matter most.
This blog explores why the Dakotas are attracting attention from hyperscalers, colocation providers, and forward-thinking enterprises. We'll highlight the strategic advantages, emerging projects, and how these rural states are playing an outsized role in the future of edge computing.
Why the Dakotas? Key Competitive Advantages
1. Abundant and Affordable Energy
Both states benefit from some of the lowest energy costs in the nation. Thanks to a mix of wind, hydroelectric, and coal power, data centers can access reliable and cheap electricity—a critical factor for 24/7 operations.
2. Renewable Energy Growth
The Dakotas are harnessing the wind. North Dakota ranks among the top five U.S. states for wind energy production, while South Dakota is a leader in hydroelectric power. This allows operators to meet carbon-reduction goals without sacrificing performance.
3. Cool Climates for Free Cooling
With long, cold winters and mild summers, the Dakotas offer ideal conditions for natural or "free" cooling, which can significantly lower operational costs and environmental impact.
4. Ample Land for Expansion
Rural landscapes mean data centers can be built on large, inexpensive plots—perfect for hyperscale campuses or modular edge deployments.
5. Low Natural Disaster Risk
Unlike coastal areas, the Dakotas face minimal risk from hurricanes, wildfires, and earthquakes. This makes them ideal for mission-critical infrastructure that must stay online year-round.
6. Strategic Central Location
Geographically centered, the Dakotas serve as key connectivity points between East and West Coast markets. This is crucial for edge computing, which relies on low-latency access to end users.
Edge Computing in Rural America
As edge computing evolves, the traditional focus on Tier 1 cities is shifting toward underserved but strategically located regions. The Dakotas check multiple boxes for edge infrastructure:
- Proximity to underserved rural and mid-sized cities
- Favorable latency to major U.S. hubs
- Lower deployment costs
- Availability of skilled labor through technical colleges and military installations
Edge data centers in the Dakotas can support use cases ranging from smart agriculture and autonomous trucking to drone logistics, IoT manufacturing, and rural broadband expansion.
Key Projects and Investments
Applied Digital in Ellendale, ND
Applied Digital is building a massive data center campus powered by wind and hydroelectric energy. The facility is designed for high-density computing and blockchain workloads and highlights the region's energy surplus and scalability potential.
Sabey Data Centers' Expansion Plans
Sabey Data Centers has explored land acquisition in South Dakota as part of a broader edge strategy targeting rural and emerging markets.
State Incentive Programs
South Dakota's Board of Economic Development and North Dakota's Department of Commerce offer tax exemptions, fast-track permitting, and grants to attract digital infrastructure projects.
Fiber Infrastructure Improvements
Both states are investing in middle-mile and long-haul fiber. Public-private partnerships are expanding broadband access, making the region more viable for latency-sensitive services.
Use Cases Driving Edge Demand in the Dakotas
1. Smart Agriculture
IoT sensors, drone-based crop monitoring, and AI-powered irrigation systems require fast data processing close to the source. Edge data centers can reduce latency for precision farming operations.
2. Autonomous Vehicles and Trucking
With major highways and freight routes crossing the Dakotas, edge infrastructure can support autonomous vehicle navigation, fleet logistics, and V2X (vehicle-to-everything) communications.
3. Rural Telemedicine
Edge computing can power low-latency, high-resolution remote healthcare services, from diagnostics to robotic surgeries—particularly valuable in remote communities with limited access to hospitals.
4. Distributed AI Training
As AI models get more decentralized, training can occur closer to the data source. Edge facilities in rural areas allow localized AI development for agriculture, energy, and logistics sectors.
5. Disaster Resilience and Backup
Edge data centers in low-risk areas like the Dakotas provide backup for more vulnerable facilities on the coasts, improving national IT resilience.
Sustainability and ESG Commitment
As enterprises face pressure to reduce emissions, the Dakotas offer a sustainable path to digital expansion:
- Wind and hydroelectric sources power large portions of the grid
- Cooler climate reduces the need for mechanical cooling systems
- Lower carbon footprint compared to energy-intensive urban hubs
- Supportive regulatory climate for green infrastructure
Many hyperscalers and edge providers are evaluating the Dakotas as part of their ESG-aligned site selection strategies.
Challenges to Consider
1. Talent Availability
While technical education programs are growing, the workforce may be more limited than in major metros. Partnerships with universities and military bases are helping bridge this gap.
2. Limited Air Connectivity
For companies that require frequent travel, limited flight options to the Dakotas may present logistical challenges.
3. Brand Recognition and Perception
The Dakotas are not yet widely known for tech infrastructure. Continued investment and success stories will be needed to shift market perception.
The Road Ahead
Industry analysts forecast that edge data center growth in the Dakotas will continue to accelerate through 2030, fueled by:
- Rising demand for rural and regional digital services
- AI-driven applications needing localized compute
- Infrastructure funding through federal and state grants
- Public-private collaboration on broadband and power
Expect to see more modular, prefabricated, and micro data centers dotting the plains in the coming years.
The Dakotas are no longer just flyover country—they’re fast becoming key nodes in the next generation of digital infrastructure. With unbeatable energy economics, geographic advantages, and growing edge demand, North Dakota and South Dakota are building big.
For businesses looking to scale sustainably and position themselves at the heart of the edge revolution, the Dakotas offer fertile ground. As investment pours into rural America, the future of data centers looks cooler, cleaner, and more connected than ever.
Stay tuned as we continue tracking rural innovation and the expanding frontier of edge infrastructure in the American heartland.
