Silicon Valley Data Centers Expands Modestly as Power‑Rich States Capture Mega‑Campus Growth

Silicon Valley’s data center market grew modestly in the second half of 2025, limited by power constraints and high construction costs, according to CBRE’s latest North American Data Center Trend Report.

Silicon Valley inventory was 489.2 megawatts (MW) in H2 2025, a 4% increase from H2 2024. Meanwhile, vacancy increased slightly to 4.7%, up from 4.5% in H1 2025. This is above the national vacancy rate of 1.4%, which reached a historic low even amid a 36% increase in total capacity.

Silicon Valley had 144 MW under construction in H2 2025, 84% of which has been preleased. This is down from 167.8 MW under construction in H2 2024. Nationally, construction activity declined for the first time since 2020 due to extended timelines tied to permitting, zoning approvals and sourcing adequate power.

“As demand for power accelerates, the large deployments are taking place in states with more abundant energy resources. The Bay Area’s higher costs, constricted infrastructure, and regulatory constraints have resulted in smaller data centers focused on demand requiring proximity to customers,” said Bill Dougherty, executive vice president with CBRE’s Data Center Solutions team in the San Francisco Bay Area.

Colocation requirements of 10 MW or more of contiguous space are commanding a premium due to limited availability. Rental rates ranged from $180-275 per kW/month, among the highest in the primary markets due to power constraints. The national average lease rate rose by 6.5% year-over-year to $194.95 per kW/month, marking the fourth straight annual increase.

Top Data Center Markets

Northern Virginia expanded to 4,039.6 MW of total inventory, 37% more than a year prior, as the region delivered more than 1 gigawatt (GW)** of new capacity in 2025 amid sustained hyperscale and AI-driven demand. The region now has nearly three and a half times more data center capacity than all secondary US data center markets*** combined.

Other notable data center markets include Atlanta, one of the fastest-growing regions, with 2,076 MW under construction. Dallas-Fort Worth is now the third North American market to surpass 1 GW of total supply, joining Northern Virginia and Atlanta.

The combination of faster long-distance networks and soaring demand for AI training has opened the door for new markets previously considered “too remote” for large-scale development. Markets such as Nevada, Pennsylvania and Michigan are increasingly attractive due to abundant land, more flexible permitting environments and potentially easier access to power.

Top 10 Largest North American Data Center Markets by Inventory (MW)