desert cluster

The Desert Cluster represents the Southwest’s emerging datacenter corridor, stretching from Arizona through Nevada to New Mexico. The region combines abundant solar energy resources, vast available land, free air cooling for much of the year, and increasingly strategic positioning for West Coast and hyperscale deployments.

overview

geographic scope

Primary States

• Arizona (Phoenix metro dominance)
• Nevada (Reno and Las Vegas clusters)
• New Mexico (emerging opportunities)

Major Metro Areas

• Phoenix/Mesa, AZ (concentrated development)
• Reno/Sparks, NV (8 projects) - Northern Nevada cluster
• Las Vegas, NV (6 projects) - Southern Nevada hub
• Albuquerque, NM (emerging market)

Key Cities

• Phoenix area: Mesa (6 projects), Goodyear (5), Chandler, Avondale
• Nevada: Reno, Sparks, Las Vegas, Henderson
• Emerging: Eloy AZ, Buckeye AZ, rural sites

phoenix metro area dominance

Greater Phoenix has emerged as a major datacenter market, with massive hyperscale campuses and mega-developments.

major hyperscale projects

Microsoft West US 3 Azure Region ($258M, operational 2021)

• El Mirage and Goodyear locations
• 280+ acres El Mirage, 450+ acres Goodyear
• Two datacenters operational
• Adiabatic cooling: zero water cooling when below 85°F
• 763 FTE projected by end 2026
• Average datacenter job: $148,000 annually

Meta Mesa Data Center ($1B, under construction)

• 2.5 million square feet
• 396-acre site
• Multiple buildings in ‘H’ configuration
• First two buildings operational January 2025
• Three more buildings under construction
• DPR Construction
• 3841 S. Ellsworth Road location

Google Mesa Data Center (Redhawk) ($1B, under construction)

• 750,000 square feet
• 187-acre campus
• First building: 288,530 sq ft (completion July 2025)
• Second building: 280,000 sq ft (planned)
• Air-cooled technology
• Google’s first physical presence in Arizona
• Northwest Elliot and Sossaman roads

Vantage Phoenix Campus ($1.5B, under construction)

• 1 million square feet
• 176 MW capacity
• 50-acre Goodyear campus
• Five datacenters planned
• $735M refinancing June 2024
• Net zero carbon commitment by 2030

mega-campus developments

Vermaland La Osa Data Center Park ($33B planned, Eloy)

• 3,300-acre site
• 3 GW power capacity
• Would be largest US datacenter development
• Hybrid energy: solar, natural gas, battery storage
• Natural gas plant first phase, then solar
• Pinal County location (Phoenix-Tucson corridor)
• Qualified Opportunity Zone
• Approval anticipated Q1 2026

Tract Buckeye Data Center Park ($20B planned)

• 2,069-acre parcel
• 1.8 GW capacity
• 20 million square feet
• Up to 40 individual datacenters at full buildout
• 15-year multi-phase development
• $136M land acquisition
• 300 high-paying jobs, 2,000 construction jobs peak
• Buckeye City Council approved August 2024

Novva Data Centers Mesa Campus ($3B planned)

• 300 MW capacity
• 159-160 acre site
• Northwest Ellsworth and Warner roads
• Two-phase development over decade
• Planning and Zoning Board approved January 2025

colocation and specialized providers

Stream Data Centers Phoenix Campus (Goodyear)

• 2 million square feet
• 280 MW capacity
• 157-acre campus
• PHX I: 418,000 sq ft, fully leased, operational
• PHX II: under construction for 2025
• 2950 S. Litchfield Road
• 20-year sales tax exemption for tenants

Compass Datacenters Goodyear Campus

• 1.8 million square feet
• 350 MW capacity
• 225-acre campus (equivalent to 31 football fields)
• Eight datacenters planned
• First two: 72 MW combined
• Three diverse fiber paths
• 230kV substation adjacent

Aligned Data Centers Phoenix Campus

• 1 million square feet
• 180 MW capacity
• 55-acre campus operational
• PHX-01/02/03 operational (550,000 sq ft)
• Two new mega campuses planned: 400+ MW, 2M sq ft
• Delta3 patented cooling: 85% less water
• 100% renewable energy matched

Prime Data Centers Phoenix Campus (Avondale)

• 1.3 million square feet
• 240 MW capacity
• 66.5-acre campus
• Five hyperscale facilities
• First: 260,400 sq ft, 42 MW (Q3 2025)
• Closed-loop cooling: near-zero WUE
• 97% less water than equal residential neighborhood
• $2B+ Avondale investment

QTS Phoenix Campuses

• Phoenix 2: 210 MW, operational (40th Street, multiple buildings)
• Phoenix 3 (Glendale): 750 MW, 3M sq ft planned on 375 acres
  • 16 buildings each ~180,000 sq ft
  • $255.3M land acquisition July 2022

NTT Global Data Centers Mesa

• Elliot Road Campus: 240 MW, 102 acres, seven datacenters
  • First opened 2022 (126,000 sq ft)
• Pecos & Crismon Campus: 360 MW planned, 173 acres
  • $300M land purchase
  • Seven facilities
  • Closed-loop water cooling
  • Completion November 2028

specialized deployments

Edged Energy Mesa ($70M, under construction)

• 210,000 square feet
• 36 MW capacity
• ThermalWorks waterless cooling
• Conserves 142M+ gallons water annually
• AI training and inference optimized
• Topped out April 2025, online late 2025
• 8811 E. Warner Road

5C Data Centers Phoenix PHX01 ($20M, under construction)

• 140,000 square feet
• 20 MW capacity
• Power densities up to 132kW per cabinet
• AI and machine learning workloads
• Live 2025

phoenix advantages

solar energy abundance

Solar Resources

• 300+ days of sunshine annually
• Excellent solar irradiance
• Utility-scale solar economics
• On-site solar feasible
• Grid-scale battery storage integration

Solar Deployment

• Arizona solar capacity growing rapidly
• Solar PPAs supporting datacenter commitments
• Corporate renewable energy matching
• 24/7 carbon-free energy increasingly feasible

free air cooling

Desert Climate Benefits

• Low humidity year-round
• Cool nights even in summer
• Free air cooling below 85°F (Microsoft: zero water more than half the year)
• Adiabatic cooling effective
• Evaporative cooling efficient when needed

Water Conservation

• Air-cooled designs (Google Mesa)
• Waterless cooling technologies (Edged ThermalWorks)
• Closed-loop systems (Prime, NTT)
• Near-zero WUE achievable
• Response to water scarcity concerns

available land

Vast Sites

• Thousands of acres available
• Maricopa County: enormous developable land
• Pinal County: Phoenix-Tucson corridor
• Low land costs relative to other markets
• Accommodating local governments

Infrastructure

• Industrial zoning established
• Power substations available or buildable
• Fiber connectivity expanding
• Transportation access (I-10, I-17, Loop 101, 202)

nevada clusters

Nevada hosts two distinct datacenter markets: Reno/Sparks in the north and Las Vegas in the south.

reno/sparks cluster

Northern Nevada Advantages

• 8 projects in Reno/Sparks region
• Proximity to California without California costs/regulations
• Tahoe-Reno Industrial Center (massive 107,000-acre site)
• Low-latency to San Francisco Bay Area
• Tax incentives (no corporate income tax, data center tax abatements)
• Abundant renewable energy (geothermal, solar, wind)
• Free air cooling (cool nights, low humidity)

Major Projects

• Google Reno campus
• Apple Reno data centers
• Switch SUPERNAP facility (historic)
• Tesla Gigafactory proximity (TRI Center)

Strategic Positioning

• California overflow market
• Bay Area disaster recovery
• Pacific Northwest connectivity
• Lower electricity costs than California

las vegas cluster

Southern Nevada Hub

• 6 projects in Las Vegas metro
• Enterprise and colocation focus
• Casino and hospitality sector support
• Fiber connectivity hub
• Growing cloud presence

Advantages

• Las Vegas fiber connectivity
• Hotel and entertainment sector infrastructure
• Available power from Hoover Dam and regional grid
• Tax-friendly environment
• Tourism economy diversification

Challenges

• Extreme summer heat
• Water scarcity (Lake Mead concerns)
• Competition for power with Strip casinos
• Less renewable energy than other desert markets

new mexico opportunities

New Mexico offers emerging datacenter opportunities with unique advantages.

competitive factors

Energy Resources

• Abundant solar resources
• Wind energy in eastern plains
• Natural gas availability
• Lower electricity costs than coastal markets

Land and Cost

• Very low land costs
• Minimal development restrictions
• Supportive economic development
• Tax incentives available

Strategic Location

• Between Texas and Arizona/California
• Fiber corridor routes
• Less saturated than neighboring states

Challenges

• Smaller population base
• Less established technology sector
• Limited fiber infrastructure
• Water scarcity concerns

water challenges and solutions

The desert’s water scarcity drives innovation in cooling technologies.

water scarcity issues

Arizona Concerns

• Colorado River allocations declining
• Groundwater depletion
• Competition: agriculture, residential, industrial
• Lake Mead historically low levels

Nevada Critical

• Lake Mead crisis
• Las Vegas water restrictions
• Colorado River compact disputes
• Limited alternative sources

innovative cooling solutions

Air-Cooled Systems

• Google Mesa: air-cooled technology
• Eliminates water consumption
• Higher PUE in extreme heat
• Trade-off: energy vs water

Waterless Technologies

• Edged Energy: ThermalWorks waterless cooling
• 142M+ gallons saved annually per facility
• Advanced heat rejection without evaporation

Closed-Loop Systems

• Prime Data Centers: near-zero WUE
• NTT: closed-loop water cooling
• Minimal makeup water
• 97% water reduction vs traditional

Adiabatic Cooling

• Microsoft: zero water cooling below 85°F
• Over half the year water-free in Phoenix
• Seasonal efficiency optimization

Best Practices

• Waterless or near-zero WUE designs increasingly standard
• Response to community and regulatory concerns
• Corporate sustainability commitments
• Technology innovation driver

extreme heat challenges

Desert temperatures drive unique operational considerations.

summer extremes

Temperature Impacts

• Phoenix: 100°F+ for months
• Las Vegas: 110°F+ peaks
• Nighttime temperatures elevated
• Heat domes and extended heat waves

Cooling Challenges

• Higher PUE in extreme heat
• Equipment stress
• Increased energy consumption
• Backup systems critical

design responses

Advanced Cooling

• Liquid cooling for high-density racks
• Thermal storage systems
• Night-time heat rejection optimization
• High-efficiency chillers

Architectural Solutions

• White/reflective roofs
• Insulation optimization
• Strategic building orientation
• Shading and thermal mass

renewable energy integration

The Desert Cluster leads in solar energy datacenter integration.

solar leadership

Arizona Solar

• Excellent solar resources
• Utility-scale solar expanding rapidly
• Corporate PPAs common
• On-site solar increasingly feasible
• Grid-scale battery storage integration

Nevada Solar

• Northern Nevada solar farms
• Southern Nevada utility-scale projects
• Renewable portfolio standards
• Geothermal resources (Northern Nevada)

New Mexico Solar

• Outstanding solar irradiance
• Lower development costs
• Large available land
• Renewable energy growth

24/7 carbon-free energy

Feasibility

• Solar + battery storage
• Geothermal baseload (Nevada)
• Grid diversity
• Nuclear from Palo Verde (Arizona)

Palo Verde Nuclear

• Arizona: 3.9 GW Palo Verde Nuclear Generating Station
• Largest nuclear plant in US
• Carbon-free baseload
• 24/7 clean energy component

network connectivity

fiber infrastructure

Phoenix Metro

• Multiple diverse fiber routes
• California connectivity
• Texas connectivity
• Established carrier presence
• Growing edge computing ecosystem

Reno/Sparks

• Low-latency to Bay Area
• Pacific Northwest routes
• Sacramento connectivity
• Zayo, Level3, others

Las Vegas

• California fiber routes
• Southwest hub
• Multiple carriers
• Gaming industry infrastructure

Challenges

• Less dense than coastal markets
• Some rural gaps
• Longer distances to major markets
• Continuing buildout needed

community opposition

Desert Cluster faces growing community resistance.

arizona opposition

Tucson Project Blue (Canceled)

• Amazon AWS $3.6B, 600 MW, 290-acre campus
• Tucson City Council unanimously voted to stop work
• Community opposition: water and energy consumption
• Dozens of citizens testified against
• Project abandoned

Mesa Concerns

• Concentration of datacenters in Mesa
• Water usage worries
• Power grid concerns
• Traffic and construction impacts

Pinal County Debates

• Vermaland $33B project scrutiny
• Water rights questions
• Rural character preservation
• Economic benefits vs resource impacts

nevada issues

Las Vegas Water

• Lake Mead crisis heightens scrutiny
• Competition for scarce water
• Cooling technology requirements
• Regulatory pressure

Reno Development

• Rapid industrial growth concerns
• TRI Center impacts
• Water table questions
• Local infrastructure strain

solutions and responses

Industry Adaptations

• Waterless cooling technologies
• Renewable energy commitments
• Community engagement programs
• Economic impact demonstrations
• Workforce development investments

Policy Evolution

• Water consumption regulations
• Renewable energy requirements
• Community benefit agreements
• Environmental impact assessments

economic development

job creation

Direct Employment

• High-skill, high-wage jobs
• Typical datacenter job: $80,000-150,000
• Construction jobs during buildout
• Security, maintenance, operations

Phoenix Examples

• Microsoft: 763 FTE projected by 2026
• Google Mesa: 1,200+ construction jobs
• Meta: 100+ operational jobs
• Aggregate: thousands of positions

tax revenue

Property Taxes

• Significant industrial property base
• Equipment taxation varies
• Infrastructure investment value

Sales Tax

• Equipment purchases
• Construction materials
• Ongoing supplies

Incentives

• Tax abatements common (Nevada especially)
• Economic development agreements
• Infrastructure support
• Workforce training programs

future outlook

continued growth

Near-Term (2025-2027)

• Mega-campus buildouts (Vermaland, Tract, Novva)
• Hyperscale completions (Google, Meta, Microsoft)
• Specialized AI deployments
• Reno/Sparks expansion

Medium-Term (2027-2030)

• Phoenix as top-5 US datacenter market
• Solar + storage 24/7 clean energy demonstrations
• Waterless cooling technology leadership
• Las Vegas diversification

Long-Term (2030+)

• 50+ GW regional capacity
• Solar energy showcase
• Water conservation technology export
• Desert datacenter design standards

technology leadership

Cooling Innovation

• Waterless technologies mature
• Near-zero WUE standard
• Advanced liquid cooling
• Heat reuse applications

Renewable Integration

• Solar + battery storage leadership
• 24/7 carbon-free energy achievement
• Grid-interactive computing
• Demand response innovation

challenges ahead

Resource Constraints

• Water availability
• Grid capacity in some areas
• Community acceptance
• Environmental regulations

Climate Change

• Increasing extreme heat
• Water scarcity worsening
• Renewable energy even more critical
• Resilience requirements

key statistics by market

phoenix metro

• Projects: 30+
• Investment: $90B+
• Power: 10+ GW
• Status: rapid growth, mega-campus focus
• Focus: hyperscale, colocation, AI

reno/sparks

• Projects: 8
• Investment: $10B+
• Power: 2 GW+
• Status: California overflow, steady growth
• Focus: hyperscale, enterprise, Bay Area connectivity

las vegas

• Projects: 6
• Investment: $5B+
• Power: 1 GW+
• Status: enterprise and colocation
• Focus: hospitality sector, enterprise, edge

major operators

hyperscale providers

• Google (3 projects, Mesa and Reno focus)
• Meta (Mesa flagship operational)
• Microsoft (West US 3 Azure Region operational)
• Amazon AWS (Tucson canceled, but regional presence)
• Apple (Reno presence)

colocation and developers

• Tract (Buckeye $20B mega-campus)
• Vantage Data Centers (Phoenix campus)
• Novva Data Centers (3 projects, Mesa focus)
• Stream Data Centers (Goodyear campus)
• Compass Datacenters (Goodyear campus)
• Aligned Data Centers (Phoenix expansion)
• Prime Data Centers (Avondale campus)
• QTS Data Centers (Phoenix 2 and 3)
• NTT Global (Mesa campuses)
• CyrusOne (Chandler presence)
• Digital Realty (Phoenix presence)

specialized operators

• Vermaland ($33B La Osa project)
• Edged Energy (waterless cooling specialist)
• 5C Data Centers (AI/ML focus)
• Switch (historic Reno SUPERNAP)

conclusion

The Desert Cluster represents a unique datacenter market combining abundant solar energy, vast available land, innovative water conservation, and strategic West Coast connectivity. Phoenix’s emergence as a mega-campus destination, with projects like Vermaland’s $33B La Osa park and Tract's$20B Buckeye development, positions Arizona as a hyperscale powerhouse. Nevada’s dual clusters in Reno and Las Vegas provide California overflow and enterprise services. The region’s challenges—water scarcity and extreme heat—drive technological innovation in cooling and renewable energy integration. As the cluster matures, it is establishing new standards for desert datacenter design: waterless cooling, solar energy integration, and sustainable operations in resource-constrained environments. The Desert Cluster’s combination of renewable energy abundance, cost advantages, and technological innovation positions it as a critical component of America’s datacenter infrastructure landscape.