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Curious Iowa: What’s behind the recent rise in data center projects?
Companies are investing billions into data center campuses statewide. Here’s what they do and how they impact surrounding communities.
Nov. 3, 2025 5:30 am, Updated: Nov. 3, 2025 7:13 am
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Last week, Google announced its intent to purchase nuclear power from the Duane Arnold Energy Center near Palo to further power the tech giant’s massive, ongoing investment into artificial intelligence.
The plan, pending regulatory approval, is to purchase energy from the Linn County site to help power Google’s growing fleet of data centers — large facilities that house computer servers, data storage and other technical equipment.
Already, the company has one such center under construction in southwest Cedar Rapids and a second proposed near Palo. Another developer, QTS, also is in the process of constructing a Cedar Rapids data center.
Those projects, both realized and proposed, speak to a state- and nationwide rise in data center projects associated with growing demand for artificial intelligence, cloud computing and other data-intensive technology.
But what really happens inside data centers, why are they coming to Iowa and what impacts do the facilities have on surrounding communities?
Those are some of the questions submitted to Curious Iowa, a weekly series from The Gazette that answers readers’ questions about our state and how it works. In this installment, we’ll take a look at the recent rise in data center projects and what it means for Iowans.
What is a data center?
At their most basic level, data centers are large buildings filled with computing machines and other IT infrastructure that store, process and transmit large amounts of digital information. Data center campuses refer to sites where several such buildings are co-located.
The buildings typically look bland and boxy from the outside with an interior that holds rows and rows of servers working to process massive amounts of data to support everything from search engines and streaming platforms to chatbots and other AI-powered tools.
“Data centers are the backbone of our digitally connected lives,” a QTS spokesperson said in a written statement to The Gazette. “You access a data center whenever you use your cellphone, a credit card, the cloud or any online activity.”
Such centers have existed since the early days of computing but have evolved rapidly in recent years as technology has become more advanced and more accessible to the general public.
Some data centers are owned and run directly by the organizations that use them. Others opt to purchase access to data center infrastructure from third-party providers.
Are data centers becoming more common?
Yes, data centers are becoming increasingly common in both Iowa and the U.S. at large. The U.S. Department of Energy last year estimated that data center load had tripled over the past decade, and researchers suspect it will do so again by 2028.
That increase is driven in large part by a rising interest in artificial intelligence and cloud computing, both of which require large amounts of data and data processing to build, maintain and grow.
Google and its parent company, Alphabet, have been among the many tech companies looking to capitalize on that trend through the integration of more AI features into its search engine and through products such as its AI-powered app, Gemini.
Speaking to investors last week, Alphabet and Google CEO Sundar Pichai credited the company’s growing AI infrastructure as a major component of the gains seen during the company’s most recent fiscal quarter.
“We’re seeing AI now driving real business results across the company,” Pichai said. “Five years ago, our quarterly revenue was at $50 billion. Our revenue number has doubled since then, and we’re firmly in the generative AI era.”
Data centers act as the physical infrastructure behind those services and products. As such, Google is investing millions into new data centers nationwide — including in Iowa — to keep up the momentum.
Construction is currently underway on a Google data center campus in southwest Cedar Rapids’ Big Cedar Industrial Center. Site plans call for at least four buildings, and the company is looking to add as many as six to another site near Palo.
Why are data centers coming to Iowa?
By and large, tech companies have been drawn to Iowa by the state’s affordable, ample and environmentally friendly wind energy, a stable grid, access to high-speed fiber-optic connections, low construction costs and tax incentives.
In addition to Google and QTS, other companies investing in Iowa data centers include recognizable household names like Meta, Microsoft and Apple.
In announcing the company’s first Iowa data center project earlier this year, QTS co-CEOs Tag Greason and David Robey wrote that Cedar Rapids was ultimately selected as a project site based on the city’s “strong infrastructure, skilled workforce and forward-thinking community.”
“The need for secure and scalable infrastructure has never been more critical,” the pair wrote. “This project reflects Iowa’s leadership in embracing the future of technology, and we’re proud to invest in a state that prioritizes innovation, sustainability and community partnership.”
Construction began earlier this year on QTS’s $750 million, seven building data center campus, also located at the Big Cedar Industrial Center. Work will be done in two phases, with completion of the first phase in 2026 and the second phase being completed about a year later.
What are the community impacts from data centers?
Linn County Planning & Zoning Coordinator Charlie Nichols, who is currently overseeing the drafting of the county’s new data center-specific zoning ordinance, said data centers can have myriad impacts on surrounding communities.
In addition to taking up physical space, Nichols said data centers also consume large amounts of manufactured and natural resources like electricity and water.
The centers’ high computing power and the machinery needed to achieve it naturally require high power inputs, and the Department of Energy estimates that by 2028, data centers will account for anywhere from 6.7 to 12 percent of all U.S. electricity use
Water is most often used in data centers as a coolant to offset the massive amounts of heat created when a large number of machines run simultaneously for an extended period of time.
“You could think of a data center in some ways as being similar to a kitchen,” Nichols said. “The more work that is being done in a kitchen, the hotter it gets. If it gets too hot, then the workers (or computers) can’t work anymore.”
The amount of water used within a data center varies depending on its design with some — like the QTS buildings in Cedar Rapids — being built with closed-loop, water-free cooling design using a special refrigerant.
Impacts from energy consumption are also variable depending on where data centers source their power and the extent to which that energy comes from renewable, carbon-free resources like wind or solar.
Data centers do provide some positives for surrounding communities, as well, through increased property tax revenues, local partnerships and job growth.
The two data center campuses under construction in Cedar Rapids, for example, are expected to support a combined 3,000 construction jobs. Once operational, QTS estimates there will be 100 full-time workers at the site. Google, with a smaller campus, estimates at least 31.
Both companies have also pledged to contribute to a city-managed community betterment fund to “to increase economic development activities, including growth of amenities and infrastructure.”
QTS will pay up to $18 million toward that fund over 20 years. Google will make an annual payment of $400,000 per data center for a period of 15 years. Those payments are separate from annual property taxes, expected to add millions more to city coffers.
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Comments: grace.nieland@thegazette.com
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