DCF Trends Summit 2025 - Beyond the Blueprint: The New Realities of Data Center Investment and Site Selection

The Call for Speakers for the 2026 DCF Trends Summit is now open: PROPOSAL DEADLINE IS JAN. 9, 2026.

By the fall of 2025, the data center industry’s site-selection calculus had moved decisively beyond the familiar checklist of cheap land, available fiber, and favorable tax treatment. Power scarcity, maturing entitlement regimes, accelerating AI workloads, and intensifying community scrutiny are forcing developers and investors to rethink not just where they build, but how they present, finance, and integrate projects into local ecosystems.

Those themes converged during “Beyond the Blueprint: The New Realities of Data Center Investment and Site Selection,” a wide-ranging discussion at the 2025 Data Center Frontier Trends Summit moderated by Ed Socia, Regional Director, North America, at datacenterHawk. Joining him were Denitza Arguirova, Director of Data Center Development at Provident Data Centers; Karen Petersburg, VP of Data Center Development & Construction at PowerHouse Data Centers; Brian Winterhalter, Partner at DLA Piper; Phill Lawson-Shanks, Chief Innovation Officer at Aligned Data Centers; and Fred Bayles, VP of Corporate Development at Cologix.

What emerged was a portrait of an industry that is increasingly power-first, credibility-driven, and community-tested.

Entitlements in Mature Markets: From Excitement to Expectations

Several panelists noted that entitlement processes in mature data center markets have become more demanding and more nuanced. Early enthusiasm around tax base expansion and job creation is giving way to detailed scrutiny of architectural quality, land use sensitivity, and long-term community impact.

In markets like Loudoun County and Prince William County, panelists described a shift from approving projects on economic development merits alone to evaluating whether a proposal represents what one participant termed a “gold star” project—one that demonstrates not only technical competence, but also lessons learned from prior developments.

That standard increasingly includes higher-quality building design, enhanced setbacks and buffering, and explicit sensitivity to adjacent residential communities. In some cases, local jurisdictions are asking developers to fund or accelerate off-site infrastructure improvements—such as key road connections—that benefit the broader community, not just the data center parcel.

Credibility, the panel agreed, is now a decisive asset. Developers who can point to operational experience, improved design standards, and a track record of community follow-through are better positioned to navigate entitlement reviews that are slower, more public, and more exacting than in prior cycles.

Power Constraints Redefine Site Selection

If entitlement friction is one defining pressure, power availability is the other—and it is reshaping the entire site-selection conversation.

Panelists repeatedly returned to the idea that the industry is now “chasing power, not square footage.” Traditional assumptions about transmission expansion, utility timelines, and flat power pricing no longer hold. Electrification mandates across transportation and industry, combined with surging data center demand, are driving expectations of structurally higher power prices over time.

In response, developers are diversifying along multiple dimensions. Asset strategies are expanding beyond large hyperscale campuses toward edge-oriented facilities and Tier 2 and Tier 3 markets where power access may be faster or more flexible. Some developers are evaluating on-site natural gas generation as a near-term bridge, which in turn introduces new site-selection criteria such as gas line capacity and permitting feasibility.

Several speakers emphasized that on-site generation is not a permanent substitute for grid interconnection, but rather a transitional tool that must eventually align with utility infrastructure. That reality has elevated the importance of utility relationships. Developers can no longer approach utilities strictly as customers; partnership, transparency, and procedural alignment are increasingly necessary to move projects forward in uncertain power markets.

Sustainability, ESG, and the Limits of the Ideal

The panel addressed sustainability with a notable degree of realism. While ESG commitments remain central to investor and customer expectations, participants acknowledged that delivering more than 100 gigawatts of new data center capacity using renewables alone is not currently feasible.

Natural gas, several panelists argued, is becoming an unavoidable part of the industry’s sustainability journey—if not its final destination. Long-term PPAs tied to gas generation introduce risk, particularly as policy and market conditions evolve, but those risks can sometimes be mitigated through renewable energy credits or virtual PPAs where wind and solar resources are available.

Just as important as environmental framing is social context. Community pushback—often rooted in concerns about power costs, grid reliability, or perceived lack of local benefit—is becoming more common. Panelists stressed that data centers, while highly visible power consumers, are not the primary drivers of residential rate increases, and that communicating this distinction is essential.

But messaging alone is insufficient. Effective community engagement now extends into workforce development, education, and direct social investment. Examples cited during the discussion ranged from funding road improvements and parks to supporting food banks, homelessness programs, and STEM education pipelines. The emphasis was on sustained engagement—programs designed to outlast a single project rather than one-time contributions intended to ease permitting.

AI Changes the Math—Again

Artificial intelligence loomed over nearly every aspect of the conversation, altering assumptions about design, location, and portfolio strategy.

Panelists observed that large-scale AI training workloads are often latency-insensitive, enabling development in remote, power-rich regions. But as AI models move from training to monetization, proximity to end users becomes more critical, pulling infrastructure back toward major metros.

This dynamic is forcing operators to adapt existing portfolios. Some customers are actively deprecating legacy workloads to free up space for liquid-cooled AI deployments within current facilities. Others are exploring internal or private cloud models to maintain data control and privacy as AI use expands.

Hardware evolution adds another layer of uncertainty. Emerging rack architectures tied to next-generation platforms are pushing per-unit power requirements into the megawatt range, fundamentally reshaping data hall design. With server refresh cycles compressing to 8–12 months, flexibility and modularity are becoming survival traits rather than optional features.

More than one speaker described the moment as an “iPhone-scale” inflection point—transformative, rapid, and difficult to forecast with confidence.

Markets, Capital, and the Power-First Pivot

The panel closed with a candid assessment of market dynamics and investor education. Site selection today is a multi-variable negotiation involving power access, connectivity, tax structures, and entitlements, with power now leading the sequence. The industry has largely inverted its traditional approach: securing power first, then locking down land.

That shift carries implications for capital. Investors, panelists said, must be educated on realistic timelines, permitting risk, supply-chain constraints, and financial structures such as take-or-pay power commitments. Misaligned expectations can derail otherwise viable projects.

When asked about bullish regions, participants pointed to Pennsylvania, Alabama, Ohio, Oklahoma, Minneapolis, and other Tier 3 markets with favorable utility relationships, gas infrastructure, or business-friendly regulatory climates. Some tier-one metros remain attractive, but often only for specific operators with established positions and relationships.

Across markets, local authorities increasingly favor projects that are visibly grid-connected and contribute to regional energy infrastructure, reinforcing the link between technical design choices and public acceptance.

Beyond the Blueprint

Taken together, the discussion underscored a central reality: the data center industry can no longer rely on a standardized playbook. Success now depends on power strategy, institutional credibility, adaptive design, and authentic community integration. The blueprint still matters—but it is no longer enough by itself.

The Call for Speakers for the 2026 DCF Trends Summit is now open: PROPOSAL DEADLINE IS JAN. 9, 2026.

At Data Center Frontier, we talk the industry talk and walk the industry walk. In that spirit, DCF Staff members may occasionally use AI tools to assist with content. Elements of this article were created with help from OpenAI's GPT5.

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