Across the United States, states are rolling out a wave of new tax incentives aimed squarely at attracting data centers, one of the country’s fastest-growing industries. Once clustered in only a handful of industry-friendly regions, today’s data-center boom is rapidly spreading, pushed along by profound shifts in federal policy, surging demand for artificial intelligence, and the drive toward digital transformation across every sector of the economy. Nowhere is this transformation more visible than in the intensifying state-by-state competition to land massive infrastructure investments, advanced technology jobs, and the alluring prospect of long-term economic growth. The past year alone has seen a record number of states introducing or expanding incentives for data centers, from tax credits to expedited permitting, reflecting a new era of proactive, tech-focused economic development policy. Behind these moves, federal initiatives and funding packages underscore the essential role of digital infrastructure as a national priority, encouraging states to lower barriers for data center construction and operation. As states watch their neighbors reap direct investment and job creation benefits, a real “domino effect” emerges: one state’s success becomes another’s blueprint, heightening the pressure and urgency to compete. Yet, this wave of incentives also exposes deeper questions about the local impact, community costs, and the evolving relationship between public policy and the tech industry. From federal levels to town halls, there are notable shifts in both opportunities and challenges shaping the landscape of digital infrastructure advancement. Industry Drivers: the Federal Push and Growth of AI The past year has witnessed a profound federal policy shift aimed squarely at accelerating U.S. digital infrastructure, especially for data centers in direct response both to the explosive growth of artificial intelligence and to intensifying international competition. In July 2025, the administration unveiled “America’s AI Action Plan,” accompanied by multiple executive orders that collectively redefined

From Cloud to GenAI, Hyperscalers Cement Role as Backbone of Global Infrastructure Data center capacity is undergoing a major shift toward hyperscale operators, which now control 44 percent of global capacity, according to Synergy Research Group. Non-hyperscale colocations account for another 22 percent of capacity and is expected to continue, but hyperscalers projected to hold 61 percent of the capacity by 2030. That swing also reflects the dominance of hyperscalers geographically. In a separate Synergy study revealing the world’s top 20 hyperscale data center locations, just 20 U.S. state or metro markets account for 62 percent of the world’s hyperscale capacity.  Northern Virginia and the Greater Beijing areas alone make up 20 percent of the total. They’re followed by the U.S. states of Oregon and Iowa, Dublin, the U.S. state of Ohio, Dallas, and then Shanghai. Of the top 20 markets, 14 are in the U.S., five in APAC region, and only one is in Europe. This rapid shift is fueled by the explosive growth of cloud computing, artificial intelligence (AI), and especially generative AI (GenAI)—power-intensive technologies that demand the scale, efficiency, and specialized infrastructure only hyperscalers can deliver. What’s Coming for Capacity The capacity research shows on-premises data centers with 34 percent of the total capacity, a significant drop from the 56 percent capacity they accounted for just six years ago.  Synergy projects that by 2030, hyperscale operators such as Google Cloud, Amazon Web Services, and Microsoft Azure will claim 61 percent of all capacity, while on-premises share will drop to just 22 percent. So, it appears on-premises data centers are both increasing and decreasing. That’s one way to put it, but it’s about perspective. Synergy’s capacity study indicates they’re growing as the volume of enterprise GPU servers increases. The shrinkage refers to share of the market: Hyperscalers are growing

Support for OpenTelemetry and open standards is another differentiator for Gartner. Vendors that embrace these frameworks are better positioned to offer extensibility, avoid vendor lock-in, and enable broader ecosystem integration. This openness is paired with a growing focus on cost optimization—an increasingly important concern as telemetry data volumes increase. Leaders offer granular data retention controls, tiered storage, and usage-based pricing models to help customers Gartner also highlights the importance of the developer experience and DevOps integration. Observability leaders provide “integration with other operations, service management, and software development technologies, such as IT service management (ITSM), configuration management databases (CMDB), event and incident response management, orchestration and automation, and DevOps tools.” On the automation front, observability platforms should support initiating changes to application and infrastructure code to optimize cost, capacity or performance—or to take corrective action to mitigate failures, Gartner says. Leaders must also include application security functionality to identify known vulnerabilities and block attempts to exploit them. Gartner identifies observability leaders This year’s report highlights eight vendors in the leaders category, all of which have demonstrated strong product capabilities, solid technology execution, and innovative strategic vision. Read on to learn what Gartner thinks makes these eight vendors (listed in alphabetical order) stand out as leaders in observability: Chronosphere: Strengths include cost optimization capabilities with its control plane that closely manages the ingestion, storage, and retention of incoming telemetry using granular policy controls. The platform requires no agents and relies largely on open protocols such as OpenTelemetry and Prometheus. Gartner cautions that Chronosphere has not emphasized AI capabilities in its observability platform and currently offers digital experience monitoring via partnerships. Datadog: Strengths include extensive capabilities for managing service-level objectives across data types and providing deep visibility into system and application behavior without the need for instrumentation. Gartner notes the vendor’s licensing

In this episode of the Data Center Frontier Show, Editor-in-Chief Matt Vincent speaks with LiquidStack CEO Joe Capes about the company’s breakthrough GigaModular platform — the industry’s first scalable, modular Coolant Distribution Unit (CDU) purpose-built for direct-to-chip liquid cooling. With rack densities accelerating beyond 120 kW and headed toward 600 kW, LiquidStack is targeting the real-world requirements of AI data centers while streamlining complexity and future-proofing thermal design. “AI will keep pushing thermal output to new extremes,” Capes tells DCF. “Data centers need cooling systems that can be easily deployed, managed, and scaled to match heat rejection demands as they rise.” LiquidStack’s new GigaModular CDU, unveiled at the 2025 Datacloud Global Congress in Cannes, delivers up to 10 MW of scalable cooling capacity. It’s designed to support single-phase direct-to-chip liquid cooling — a shift from the company’s earlier two-phase immersion roots — via a skidded modular design with a pay-as-you-grow approach. The platform’s flexibility enables deployments at N, N+1, or N+2 resiliency. “We designed it to be the only CDU our customers will ever need,” Capes says. From Immersion to Direct-to-Chip LiquidStack first built its reputation on two-phase immersion cooling, which Joe Capes describes as “the highest performing, most sustainable cooling technology on Earth.” But with the launch of GigaModular, the company is now expanding into high-density, direct-to-chip cooling, helping hyperscale and colocation providers upgrade their thermal strategies without overhauling entire facilities. “What we’re trying to do with GigaModular is simplify the deployment of liquid cooling at scale — especially for direct-to-chip,” Capes explains. “It’s not just about immersion anymore. The flexibility to support future AI workloads and grow from 2.5 MW to 10 MW of capacity in a modular way is absolutely critical.” GigaModular’s components — including IE5 pump modules, dual BPHx heat exchangers, and intelligent control systems —

Bloom Energy: A Leading Force in On-Site Power As of mid‑2025, Bloom Energy has deployed over 400 MW of capacity at data centers worldwide, working with partners including Equinix, American Electric Power (AEP), and Quanta Computing. In total, Bloom has delivered more than 1.5 GW of power across 1,200+ global installations, a tripling of its customer base in recent years. Several key partnerships have driven this rapid adoption. A decade-long collaboration with Equinix, for instance, began with a 1 MW pilot in 2015 and has since expanded to more than 100 MW deployed across 19 IBX data centers in six U.S. states, providing supplemental power at scale. Even public utilities are leaning in: in late 2024, AEP signed a deal to procure up to 1 GW of Bloom’s solid oxide fuel cell (SOFC) systems for fast-track deployments aimed at large data centers and commercial users facing grid connection delays. More recently, on July 24, 2025, Bloom and Oracle Cloud Infrastructure (OCI) announced a strategic partnership to deploy SOFC systems at select U.S. Oracle data centers. The deployments are designed to support OCI’s gigawatt-scale AI infrastructure, delivering clean, uninterrupted electricity for high-density compute workloads. Bloom has committed to providing sufficient on-site power to fully support an entire data center within 90 days of contract signing. With scalable, modular, and low-emissions energy solutions, Bloom Energy has emerged as a key enabler of next-generation data center growth. Through its strategic partnerships with Oracle, Equinix, and AEP, and backed by a rapidly expanding global footprint, Bloom is well-positioned to meet the escalating demand for multi-gigawatt on-site generation as the AI era accelerates. Oracle and Digital Realty: Accelerating the AI Stack Oracle, which continues to trail hyperscale cloud providers like Google, AWS, and Microsoft in overall market share, is clearly betting big on AI to drive its next phase of infrastructure growth.

In an AI-driven world of exponential compute demand, Aligned Data Centers is meeting the moment not just with scale, but with intent. The company’s recent blitz of strategic announcements, led by plans for a transformative new campus on legacy industrial land in Ohio, offers a composite image of what it means to build data center infrastructure for the AI era: rapid, resilient, regionally targeted, and relentlessly sustainable. From converting a former coal power plant site into a hub for digital progress in Coshocton County, to achieving new heights of energy efficiency in Phoenix, to enabling liquid-cooled, NVIDIA-accelerated AI deployments with Lambda in Dallas, Aligned is assembling a modular, AI-optimized framework designed to meet both today’s and tomorrow’s computational extremes. Ohio Expansion: A New Chapter for Conesville, and for Aligned Announced July 24, Aligned’s newest mega-scale data center campus in Central Ohio will rise on a 197-acre parcel adjacent to the retired AEP Conesville coal-fired power plant, a brownfield site that once symbolized legacy energy and is now poised to power the future of digital infrastructure. As noted by Andrew Schaap, CEO of Aligned Data Centers: “Through this strategic expansion, Aligned not only reinforces its commitment to providing future-ready digital infrastructure in vital growth markets but also directly catalyzes billions of dollars in investment for the state of Ohio and the Coshocton County community.” It’s a project with deep regional implications. The phased, multi-billion dollar development is expected to create thousands of construction jobs and hundreds of high-quality, long-term operational roles, while generating significant tax revenues that will support local services and infrastructure improvements. The campus has already secured a foundational customer, with the first facility targeting initial capacity delivery in mid-2026. This marks Aligned’s third campus in Ohio, a clear indication that the company sees the Buckeye State, with its