The surge in artificial intelligence has driven unprecedented demand for data‑center capacity, but new deployments are increasingly constrained by physical, regulatory and infrastructure limits. Savills compared 54 global markets to identify where the next wave of data‑center development is most feasible.
Why it matters
According to UNCTAD data, data centers attracted more than one‑fifth of global greenfield foreign direct investment (FDI) in 2025, making the sector a major investment destination. However, development is now often held back not by lack of capital but by network constraints: lead times for grid connections frequently exceed actual construction times, prompting developers to prioritise locations with available network capacity rather than pure demand hubs.
Key findings and ranking
Savills’ Power and Place Index evaluates cities across four pillars: power supply; water and climate; buildability; and the development environment (permitting and regulation). The study finds many of today’s largest data‑center metros did not make the top 25 because they have reached physical limits, shifting opportunity toward secondary and emerging markets.
Top positions in the index include:
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- Oslo
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- Dallas
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- Stockholm
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- Atlanta
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- Porto
Other cities in the most promising top ten are Helsinki, Chicago, Marseille and Washington DC.
Regional trends and clusters
The report identifies four distinct clusters shaping future growth:
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Nordic, renewable‑rich cities: Oslo, Stockholm and Helsinki offer inexpensive green power, spare grid capacity, cool climates and supportive regulation. Norway’s hydropower‑based system and Finland’s low‑carbon energy mix are particularly attractive for AI‑intensive workloads.
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US energy hubs: The United States—home to roughly 50 GW of active IT capacity—remains dominant. Texas offers large land availability, gas resources and growing renewable generation, although ERCOT has tightened the vetting of interconnection requests.
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Southern European challengers: Cities such as Porto, Marseille and Málaga provide relatively lower energy costs, more flexible permitting and less market competition, drawing AI projects away from saturated metropolitan centres.
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Emerging Asian markets: Mumbai, Bengaluru, Johor Bahru and Ho Chi Minh City pair low electricity costs with available grid capacity, although supply stability and the pace of network upgrades remain constraints in parts of the region. Malaysia has shown rapid growth from a low 2020 base, with Johor Bahru benefiting from proximity to land‑constrained Singapore.
Other dynamics include accelerating activity in Bangkok, while Hong Kong faces geographical constraints despite the presence of major cloud providers.
Additional considerations
- Energy costs, water access, climate conditions, skilled labour availability and local community acceptance are decisive in site selection.
- Climate risks—heatwaves, water stress and extreme weather—further narrow the set of safely operable sites.
- Well‑designed data‑center projects can, however, support grid modernisation, stimulate demand for renewables, enable waste‑heat reuse and contribute to local skills development.
Conclusion
Savills’ analysis suggests that the coming years of data‑center expansion will be shaped less by capital availability and more by energy and grid capacity, water resources, permitting regimes and climate risk. As traditional hubs near their limits, secondary and emerging cities that combine low‑carbon power, spare grid capacity and favourable development conditions will attract the next wave of AI‑focused infrastructure.
An AI assistant contributed to preparing this article; the final content was edited and verified by our journalist.
