Explainer
What is a data center, and why do we need them?
Reviewed Sep 22, 2026 · 4 sections · every figure sourced
Short answer
A data center is a physical building that houses and runs large computer systems: servers, data storage and network equipment used to store, process and move large amounts of data[1][3]. We rely on them for cloud services that support everything from online gaming to social media profiles[4], and increasingly for artificial intelligence, which is trained and run in large, power-hungry data centers[5].
- servers in a hyperscale data center, per CRS[1]
- 5,000+
- power rating of a hyperscale data center, per CRS[1]
- 100 MW+
- typical size of a conventional data center, per the IEA[2]
- 10–25 MW
The definition
The Congressional Research Service puts it simply: in its simplest form, a data center is a physical facility that houses and runs large computer systems[1]. A fuller CRS definition describes a facility housing servers, data storage devices and network equipment that provides IT infrastructure for storing, managing, processing and transmitting large amounts of data[3].
In federal statistics, data centers fall within the data processing and hosting industry (NAICS 518), which the Bureau of Labor Statistics describes as establishments that provide the infrastructure for hosting and data processing services[6].
Cloud, hyperscale and AI data centers
Cloud data centers are geographically distributed, interconnected facilities run by online service providers that let many users remotely use computing resources such as chips, software, storage and networks[1].
Hyperscale data centers are the giants. According to CRS, a hyperscale facility should contain at least 5,000 servers, occupy at least 10,000 square feet and have a power rating above 100 megawatts[1].
AI data centers are built around accelerated servers used to train and run AI models. The International Energy Agency says a conventional data center may be around 10 to 25 megawatts, while a hyperscale, AI-focused data center can be 100 megawatts or more, using as much electricity each year as 100,000 households[2]. The largest under construction as of 2025 will use 20 times as much[5].
Why we need them
A 2023 Federal Reserve Bank of Richmond analysis tied data center growth to demand for cloud computing that supports activities from online gaming to storing social media profiles[4]. Artificial intelligence has added a new, fast-growing source of demand: training and deploying AI models takes place in large, power-hungry data centers[5].
That demand is why data centers have become a local issue. They need a lot of electricity, and some need a lot of water, so where they are built matters to the towns around them. The rest of this site tracks those projects one by one.
What goes into choosing a location
Virginia's legislative audit agency, JLARC, attributes Northern Virginia's dominance to a strong fiber network, reliable and inexpensive energy, available land, proximity to major customers and a state tax incentive[7]. CRS adds that most developers prefer to buy power from the local utility and typically locate where existing utility supply is more readily available[3].
What the Census record shows
The Census currently tracks 129 major U.S. data center projects in 35 states, with 117.79 GW of planned capacity where a figure has been published. See them on the map or find projects near your ZIP code.
Common questions
What is a data center in simple terms?
A physical building that houses and runs large computer systems, such as servers, storage and network equipment, used to store, process and move large amounts of data.
What is a hyperscale data center?
According to the Congressional Research Service, a hyperscale data center should contain at least 5,000 servers, occupy at least 10,000 square feet and have a power rating above 100 megawatts.
How big is an AI data center?
The IEA says a hyperscale, AI-focused data center can have a capacity of 100 megawatts or more, using as much electricity each year as 100,000 households. A conventional data center may be around 10 to 25 megawatts.
Why do we need data centers?
They run the cloud services behind everyday online activity, from gaming to social media, and they are where AI models are trained and deployed.
Sources
- Data Centers and Their Energy Consumption: Frequently Asked Questions (CRS R48646)Congressional Research Service (text via EveryCRSReport.com) · 2026-05-12
3 source excerpts
“To be considered a hyperscale data center, a facility should contain at least 5,000 computer servers and a large scale of network equipment and occupy at least 10,000 square feet of physical space, with an electric power rating, sometimes referred to as power draw, exceeding 100 megawatts (MW).”
“In its simplest form, a data center is a physical facility that houses and runs large computer systems.”
“Some online service providers operate geographically distributed and interconnected data centers and allow multiple users to remotely access computing resources such as data processing chips, software, data storage, networks, and applications hosted by these data centers, which are called "cloud data centers."”
- Understanding the energy-AI nexus – Energy and AIInternational Energy Agency · 2025-04-10
2 source excerpts
“A conventional data centre may be around 10-25 megawatts (MW) in size.”
“A hyperscale, AI-focused data centre can have a capacity of 100 MW or more, consuming as much electricity annually as 100 000 households.”
- Data Centers and the Electricity Grid: Frequently Asked Questions (CRS R49326)Congressional Research Service (text via EveryCRSReport.com) · 2026-09-01
2 source excerpts
“A data center is a physical facility housing computer servers, data storage devices, and network equipment that can provide information technology (IT) infrastructure services for storing, managing, processing, and transmitting large amounts of data.”
“Buying electricity from the local utility is the preferred option for most data center developers and is expected to remain so for the foreseeable future. Data center owners who prefer this option typically choose to locate their facilities in areas with more readily available existing utility electricity supply.”
- Virginia's Data Centers and Economic Development (Econ Focus, Q2 2023)Federal Reserve Bank of Richmond · 2023-05-31
Source excerpt
“More recently, data center growth has been spurred by an explosion in the demand for cloud computing services to support activities ranging from online gaming to the storage of social media profiles.”
- Energy and AI: Executive summaryInternational Energy Agency · 2025-04-10
2 source excerpts
“Training and deploying AI models takes place in large and power-hungry data centres.”
“A typical AI-focused data centre consumes as much electricity as 100 000 households, but the largest ones under construction today will consume 20 times as much.”
- Data Processing, Hosting, and Related Services: NAICS 518 (Industries at a Glance)U.S. Bureau of Labor Statistics
Source excerpt
“Industries in the Data Processing, Hosting, and Related Services subsector group establishments that provide the infrastructure for hosting and/or data processing services.”
- Data Centers in Virginia (Report 598, Summary)Joint Legislative Audit and Review Commission, Commonwealth of Virginia · 2024
Source excerpt
“Multiple factors have contributed to Northern Virginia's market prominence, including a strong fiber network, supply of reliable cheap energy, available land, proximity to major national customers, and the creation of a state data center tax incentive.”
Each source was opened and checked against the excerpt shown. Company statements are identified as such. Figures are as published; where sources differ, each is shown.