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6+ must-attend Houston energy transition events for May 2026

Mark Your Calendars

The Enverus Evolve Conference kicks off our May event list. Courtesy photo

Editor's note: May is starting off strong with two of the month's largest events beginning on Monday, May 4: Enverus Evolve Conference and OTC. Mark your calendars and begin registering now.

May 4-6, 2026 — Enverus Evolve Conference

Staying ahead of the curve in the energy sector is critical. This conference is designed to equip energy leaders with foresight in the energy market, providing cutting-edge technological know-how, sessions and networking opportunities industry leaders, and offering practical guidance on how to apply technology to solve big problems.

This event begins May 4 at Marriott Marquis, Downtown Houston. Register here.

May 4-7, 2026 — OTC 2026

The world’s largest offshore energy technology event returns to Houston beginning May 4. Dr. Mohamed Irfaan Ali, president of the Co-operative Republic of Guyana, will officially open the 2026 Offshore Technology Conference, delivering the Opening Address on May 4. This year's event will be cover the theme of "Steering Offshore Energy Innovation into the Future," emphasizes the pivotal role oil and gas, along with other emerging offshore energy sources, will play in shaping a sustainable and energy-secure future.

This event begins May 4 NRG Park. Register here.

May 14, 2026 — Gulf Coast ASSP Energy Corridor Section Meeting

At this lunchtime session, Chris Garza will speak on “Demystifying Regulatory Frameworks.” This session provides a comprehensive overview of key regulatory requirements concerning air quality, water discharge, and land management. Attendees will gain actionable insights into permits, reporting obligations, pollution prevention planning, and hazardous waste management. This session demystifies regulatory frameworks and empowers businesses to meet their legal responsibilities while promoting a culture of environmental stewardship. Attendees are welcome to stay for lunch and networking after the session.

This event takes place May 14 at 960 Memorial City Way. Register here.

May 16, 2026 — Energy Valuation Conference

ASA Houston's 16th annual EVC brings together energy valuation professionals and industry thought leaders to present timely educational valuation topics, with a focus on valuation impacts in the transition of power generation from fossil fuel to non-carbon, renewables, sustainable energy

This event takes place May 16 at The Briar Club, and there will be a live webcast. Register here.

May 18-19, 2026 — Geothermal Transition Summit North America

This two-day summit serves as the meeting point for the geothermal and oil and gas industries and will focus on geothermal energy, including scaling plants and navigating state regulations. The event promises 40 expert speakers, 15 exhibition spaces, and networking opportunities with 250 industry decision makers.

This event begins May 18 at Norris Conference Center. Register here.

May 20-21, 2026 — ESF North America

ESF North America returns for its 5th edition, under the theme of “innovation and adaptation.” Attendees will explore how technology, innovation, and collaboration can drive a resilient, competitive refining and chemicals industry.

This event begins May 20 at The Westin Oaks Houston at the Galleria. Register here.

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OTC returns May 4-7, 2026. Photo via OTC/LinkedIn

Here are 10+ must-attend Houston energy events for Q2 2026

Mark Your Calendars

Editor's note: Q2 is underway, with a host of must-attend events for those in the energy transition sector. Houston will welcome some of the world's top energy conferences, expos, and forums over the next few months, so mark your calendars and begin registering now.

April 8-9, 2026 — AI in Oil & Gas Conference

In a world where data is the most valuable asset, how do you turn mountains of information into decisive, real-time action while also meeting ever-tightening emissions targets? The 2026 AI in Oil & Gas Conference will address these challenges and opportunities by bringing together 500+ senior executives, technical innovators, and operational leaders who are ready to push the energy industry forward.

The conference begins April 8 at Hyatt Regency Houston West. Register here.

April 20-21, 2026 — EMC25

Energy Marketing Conferences is thrilled to host EMC25 in Houston. This is one of the largest retail energy conferences in North America, and it plays host to some of the most influential energy providers, brokers, and suppliers in the energy industry.

This event begins April 20 at Hilton Post Oak Galleria. Register here.

April 20-21, 2026 7th American LNG Forum

Join LNG industry professionals, innovators and policymakers in Houston—one of the world’s leading energy hubs, to discover groundbreaking technologies that are driving the future of liquified natural gas. From market dynamics to decarbonization strategies, this is your chance to connect, learn and become part of the LNG revolution at American LNG Forum.

This event begins April 20 at the Houston Marriott West Loop by The Galleria. Register here.

April 22, 2026 — 6th American Hydrogen & CCUS Forum

Connect with hydrogen industry leaders, innovators, and policymakers at the American Hydrogen & CCUS Forum in Houston — one of the world’s foremost energy hubs. Discover groundbreaking technologies and strategies showcased at the Hydrogen Conference and Hydrogen Expo, focusing on hydrogen fuel cell technology, hydrogen energy, and low-carbon hydrogen solutions.

This event takes place April 22 at the Houston Marriott West Loop by The Galleria. Register here.

April 23-24, 2026 — American Data Centers Forum

American Data Centers Forum: From Building to Powering is a national forum dedicated to the energy, infrastructure, and innovation behind America’s next generation of data centers. The event will bring together developers, utilities, energy providers, policymakers, and technology leaders to address the critical challenge of scaling digital infrastructure sustainably and securely. From hydrogen and small modular reactors (SMRs) to microgrids, renewables, and carbon capture (CCUS), the discussions will explore real pathways to decarbonizing and strengthening the nation’s digital backbone.

This event begins April 23 at the Houston Marriott West Loop by The Galleria. Register here.

April 27-29, 2026 — PPMD Energy Data Convention

This flagship conference is dedicated to exploring the latest advancements and trends in energy data, offering opportunities for networking, knowledge exchange, and collaboration. Gain insights into cutting-edge data management practices and how they can enhance operational efficiency, support strategic decision-making, and contribute to achieving long-term objectives. This year's theme is "From Chaos to Clarity: Data-driven Value in the Energy Evolution. Highlights include keynote presentations from renowned experts, interactive panel discussions, hands-on workshops, and an exhibitor showcase.

This event begins April 27 at Norris Conference Center. Register here.

May 4-6, 2026 — Enverus Evolve Conference

Staying ahead of the curve in the energy sector is critical. This conference is designed to equip energy leaders with foresight in the energy market, providing cutting-edge technological know-how, sessions and networking opportunities industry leaders, and offering practical guidance on how to apply technology to solve big problems.

This event begins May 4 at Marriott Marquis, Downtown Houston. Register here.

May 4-7, 2026 — OTC 2026

The world’s largest offshore energy technology event returns to Houston beginning May 4. Dr. Mohamed Irfaan Ali, president of the Co-operative Republic of Guyana, will officially open the 2026 Offshore Technology Conference, delivering the Opening Address on May 4. This year's event will be cover the theme of "Steering Offshore Energy Innovation into the Future," emphasizes the pivotal role oil and gas, along with other emerging offshore energy sources, will play in shaping a sustainable and energy-secure future.

This event begins May 4 NRG Park. Register here.

May 18-19, 2026 — Geothermal Transition Summit North America

This two-day summit serves as the meeting point for the geothermal and oil and gas industries and will focus on geothermal energy, including scaling plants and navigating state regulations. The event promises 40 expert speakers, 15 exhibition spaces, and networking opportunities with 250 industry decision makers.

This event begins May 18 at Norris Conference Center. Register here.

June 1-4, 2026 — CLEANPOWER 2026 Conference and Exhibition

CLEANPOWER unites policymakers, experts, and corporate leaders to solve the challenges that none can solve alone. This must-attend, four-day conference is packed with cutting-edge discussions about wind, solar, storage, and transmission; dealmaking; networking; and fun.

This event begins June 1 at the George R. Brown Convention Center. Register here.

June 16-17, 2026 — Energy Projects Conference & Expo

The Energy Projects Conference & Expo (EPC Show) is the largest event in North America for professionals working at the heart of major energy projects. The essential event for engineering, construction, commissioning, operations and maintenance across multiple energy sectors brings together five leading conferences under one roof. Conference subjects span LNG exporting, hydrogen and ammonia, midstream, petrochem and refining, and sustainable aviation fuels.

This event begins June 16 at George R. Brown Convention Center. Register here.

Ten young professionals have been named to the Offshore Technology Conference's 2025 Emerging Leaders class. Photo via Linkedin.

OTC names 4 Houston professionals as 2025 emerging leaders

young pros

Four Houston professionals have been named to the Offshore Technology Conference's 2025 Emerging Leaders class.

The group of 10 represents individuals with less than 10 years of experience who have "demonstrated exceptional talent, commitment, and promise as future leaders in the offshore energy sector," according to a release from OTC. They were recognized at the annual conference, which was held May 5-8 at NRG Center.

Each year, Emerging Leaders are selected by the previous year’s group and are members of an OTC sponsoring, endorsing or supporting organization. While a number hail from the Houston area, this year's group is comprised of energy professionals from all over the world.

“This year’s leaders have a clear passion for the industry, are eager to play a role in its future, and serve as inspiration to others through their exemplary commitment to excellence and pursuit of new horizons.” Alex Martinez, chair of the OTC Board, said in a news release.

The 2025 Houston-area Emerging Leaders include:

  • Ellen Reat Wersan, an exploration geoscientist at Chevron
  • Brooke Polk, vice president-accreditation operations at the International Association of Drilling Contractors
  • Zheng Fan, assistant professor in the mechanical engineering technology department at the University of Houston
  • Scott Pisarik, lead materials and corrosion engineer at Chevron

Other recipients included:

  • Yingda Lu, assistant professor in the petroleum and geosystems engineering department at The University of Texas at Austin
  • Olusola Komolafe, project engineer at Geosyntec Consultants Inc.
  • Gabriel Correa Perocco, project manager at MODEC do Brasil
  • Sridhar Krishnamoorthy, senior research fellow and PhD research scholar at the Indian Institute of Technology Madras Chennai India
  • Daniel Toerner, technical sales engineer at Bardex Corp.
  • Olawale Ajayi, reservoir engineer at NNPC Limited

OTC concluded last week and brought together energy professionals, policymakers and scholars from more than 100 countries while showcasing more than 1,000 companies. Sessions featured prominent energy execs, including Oxy president and CEO Vicki Hollub from Houston and Brazil-based Petrobras' president Magda Chambriard. According to OTC, the event has generated $1.6 billion in income for Houston’s economy since 2010.

"From the latest technology to generation-changing policy discussions, this year’s success reflects the industry’s commitment to shaping the future of energy, advancing innovations and fostering global collaboration," Martinez added in a statement.

OTC 2026 will take place May 4-7, 2026, at NRG Center in Houston.

OTC 2025 kicks off May 5 at NRG Park. Photo via OTC/LinkedIn

7 must-attend Houston energy transition events in May 2025

On the Agenda

Editor's note: May is here, and there's a full slate of must-attend energy transition events this month. Mark your calendars for these top events, including OTC 2025, CHARGE North America, and more. Please note: this article may be updated to include additional events.

May 5-9 — OTC 2025

Offshore Technology Conference 2025 will cover the the theme of "Waves of Innovation," covering offshore energy excellence." The premier five-day conference will highlight the groundbreaking advancements in offshore energy, showcasing the industry's relentless drive for innovation. As global energy needs evolve, the "Waves of Innovation" theme reflects OTC’s commitment to sustainable, cutting-edge technologies that are shaping the future of offshore energy.

Industry leaders will come together to explore new frontiers in offshore energy, emphasizing the operational efficiency, environmental responsibility, and technical excellence required to meet the challenges of tomorrow’s energy landscape.

The Opening Ceremony kicks off Monday, May 5 at 9 am. The event continues at NRG Park through May 9. Click here to register.

May 12-15 — Enverus Evolve Conference

Staying ahead of the curve in the energy sector is critical. This conference is designed to equip energy leaders with foresight in the energy market, providing cutting-edge technological know-how, sessions and networking opportunities industry leaders, and offering practical guidance on how to apply technology to solve big problems.

This event begins May 12 at Hilton Americas Houston. Click here to register.

May 12-13 — Carbon Hub Annual Meeting

The fifth-annual Carbon Hub Annual Meeting will bring together industry, academic, and research leaders at the forefront of the energy and materials transitions. Attendees will have access to thought-provoking discussions and opportunities to connect with innovators across the field. The full agenda has yet to be released, but featured speakers include David Hatrick, Vice President, Strategic Marketing and Innovation, Huntsman Advanced Materials; Luca de Rai, Vice President, Research & Development Energy, Prysmian Group; and Dhaval Shah, General Manager, Corporate Technology & Innovation, SABIC.

This event begins May 12 at Rice University. Click here to register.

May 20-21 — Geothermal Transition Summit North America

This two-day summit serves as the meeting point for the geothermal and oil and gas industries and will focus on geothermal energy, including scaling plants and navigating state regulations. The event promises 50 expert speakers, 15 tech demos, and access to eight networking events featuring approximately 250 industry decision makers.

This event begins May 20 at Norris Conference Centers - Houston CityCentre. Click here to register.

May 27-28 — 6th American LNG Forum

Join LNG industry professionals, innovators, and policymakers to discover groundbreaking technologies that are driving the future of liquified natural gas. Topics will include market dynamics and decarbonization strategies, offering attendees the chance to connect, learn, and become part of the LNG revolution.

This event begins May 27 at the Westin Galleria Houston. Click here to register.

May 28-30 — CHARGE North America

This intimate, immersive experience is tailored to forward-thinking energy professionals. The conference includes hands-on interactive workshops led by top strategists; real-world case studies; and insights from leading speakers on resilient branding, consumer expectations, and climate action. Attendees will engage in panel discussions on sustainability and energy diversification and enjoy exclusive networking opportunities with global executives and innovators.

This event begins May 28 at The Ion. Click here to register.

May 29-30 — 5th Annual American Hydrogen Forum

Connect with hydrogen industry leaders, innovators, and policymakers at the American Hydrogen Forum. Discover groundbreaking technologies and strategies focusing on hydrogen fuel cell technology, hydrogen energy, and low-carbon hydrogen solutions.

This event begins May 29 at the Westin Galleria Houston. Click here to register.

ABS and Seatrium signed a three-year Technology Collaboration Agreement at OTC. Photo courtesy of ABS

Houston company teams up with offshore partner to level up decarbonization innovation

in it together

Two companies have teamed up on decarbonization efforts and made their relationship official at Houston's Offshore Technology Conference last week.

ABS and Seatrium signed a three-year Technology Collaboration Agreement at OTC, which expands on "their long running partnership on cutting-edge marine and technology projects," per a news release.

The agreement is entitled “Accelerating Decarbonization and Energy Transition,” and covers collaboration on technologies that fall under four broad themes: decarbonization, electrification, new energies and digital transformation.

“Together, ABS and Seatrium have a remarkable history of pioneering the technological frontiers in the marine and offshore industries,” says Christopher J. Wiernicki, ABS chairman and CEO, says in a release. "Our shared vision for the future, combined with our twin cultures of innovation and collaboration mean we are well placed to safely deliver the rapid technological advance our industry needs if we are to meet emissions targets and capitalize on the opportunities offered by decarbonization and digitalization."

The agreement is intended to support commercialization across the four identified themes.

“Seatrium is making significant strides in our visionary approach to engineering a sustainable, low-carbon energy future. This progress is achievable through pivotal industry collaborations with organizations like ABS," Chris Ong, CEO of Seatrium, adds. "We are more than just partners; we are natural allies united by a shared mission and driven by a powerful vision for a sustainable future.

"ABS and Seatrium have achieved great successes through our previous collaborations, and we are committed to harnessing our distinct strengths and capabilities to push the boundaries and transform the way we approach decarbonization, energy transition, and digital transformation,” he continues.

ABS, a 150-year-old marine and offshore energy innovation company, is headquartered in the Houston area. Seatrium, which is headquartered in Singapore, was recognized by ABS as the first shipyard group to deploy smart technologies in its operations.

In a series of fireside chats, Houston energy leaders took the stage at OTC to discuss what their companies are doing in the energy transition space. Photo via LinkedIn

4 Houston energy execs sound off on future workforce, collaboration, and more at OTC

overheard

In addition to the massive exhibit floor, networking, and panels, the 2024 Offshore Technology Conference hosts thoughtful fireside chats with energy leaders throughout the ongoing conference taking place in Houston this week.

Four energy leaders from Houston took the stage to discuss what their companies are doing within the energy transition. Take a look at what topics each of the conversations tackled.

Chris Powers, vice president of CCUS at Chevron New Energies, on energy evolution and collaboration

Chris Powers introduced Chevron New Energies, an organization within Chevron that launched in 2021, to the crowd at OTC, describing the entity's focus points as CCUS, hydrogen, offsets and emerging technology, and renewable fuels — specifically things Chevron believes it has the competitive advantage.

One of the things Powers made clear in his fireside chat is that it's not going to be one, two, or even three technologies to significantly move the energy transition along, "it's going to take all the solutions to meet all the growing energy needs," he said.

And, he continued, this current energy transition the world is in isn't exactly new.

"We've been evolving our energy supply since the dawn of man," he said. "Our view is that the world has always been in an energy evolution."

"Hydrocarbons will continue to play a huge role in the years to come, and anyone who has a different view on that I think isn't being pragmatic," he continued.

Chevron has played a role in the clean energy market for decades, Powers said, pointing out Chevron Technology Ventures, which launched in the 1990s.

"No one can do this alone," he said, pointing specifically to the ongoing Bayou Bend joint venture that Chevron is working on with Equinor and TotalEnergies. "We have to bring together the right partners and the right skill sets."

Celine Gerson, group director, Americas, and president at Fugro USA, on the importance of data

Celine Gerson set the scene for Fugro, a geo data and surveying company that diversified its business beginning in 2015 to account for the energy transition. From traditional oil and gas to renewables, "it starts with the geo data," she said during her chat. She said big projects can't map out their construction without it, and then, when it comes to maintaining the equipment, the geo data is equally important.

Another message Gerson wanted to convey is that the skill sets from traditional offshore services translate to renewables. Fugro's employee base has evolved significantly over the past few years, and Gerson said that 50 percent of the workforce was hired over the past five years and 85 percent of the leadership has changed in the past seven.

Agility is what the industry needs, Celine Gerson said, adding that the "industry need to move fast and, in order to move fast, we need to look at things differently.

Attilio Pisoni, CTO of oilfield services and equipment at Baker Hughes, on the future workforce

In addition to the world making changes toward sustainability, the energy industry is seeing a workforce evolution as well, Attilio Pisoni said during his fireside chat, adding that inspiring a workforce is key to retention and encouraging innovation.

"We have a challenge in attracting young people," Pisoni said. "To be successful, you have to have a purpose."

That purpose? Combating climate change. And that, Pisoni said, needs to be able to be quantified. "As a society over all, we need to have a standard of measurement and accuracy in reporting," he said.

To future engineers, Pisoni emphasized the importance of learning outside your specific niche.

"Having seen where the world is now, whatever you study, have a concept and understanding of the system as a whole," he said.

Erik Oswald, vice president of advocacy and policy development at ExxonMobil Low Carbon Solutions, on transferable skills from upstream

When he looks at renewables and new energy, Erik Oswald said he sees a significant similarity for the talent and skill sets required in upstream oil and gas.

"A lot of the same skills are coming into focus" within the energy transition," Oswald said, specifying CCS and upstream.

Even in light of the transferrable workforce, the industry faces needs to grow its workforce in a significant way to keep up with demand — and keeping in mind the younger generations coming onto the scene.

"We're talking about recreating the entire oil and gas industry," Oswald said on preparing the workforce for the future of the energy industry. "We have to do it, it's not an option."

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Houston companies advance 200MW green ammonia plant in South Texas

coming soon

Two global companies with a major presence in Houston are teaming up on a green ammonia plant in Port of Victoria, Texas.

Topsoe, a Danish company with operations in Houston and Bayport, Texas, has been tapped to provide ammonia synthesis technology for the project being developed by First Ammonia, a New York-based company with offices in Houston and Denmark.

The flagship 200-megawatt plant will use renewable electricity to produce green hydrogen through electrolysis, which will then be combined with nitrogen from a nearby Air Liquide pipeline to make green ammonia, according to First Ammonia. It is expected to serve both U.S. and global markets.

According to First Ammonia, every 100,000 tons of electric ammonia produced avoids approximately 240,000 tons of CO2 emissions compared to fossil ammonia

The Topsoe technology used on site is designed to be able to increase production from 10 percent to 100 percent within 30 minutes, and decrease production at a similar rate, allowing the plant to respond to fluctuations from solar- or wind-based energy sources.

“Topsoe is the world leader in ammonia synthesis, and First Ammonia is delighted to continue our partnership with them in establishing a green ammonia industry in the US and around the world,” Joel Moser, CEO of First Ammonia, said in a news release.

Topsoe has previously signed on to supply its 100-megawatt solid oxide electrolyser (SOEC) to the First Ammonia project. However, the company announced in March that it did not extend the contract after multiple delays.

The First Ammonia project was originally expected to come online by 2027 and to produce 1.1 million tonnes of green ammonia. The project is now expected to reach financial before the end of 2026, with construction slated to begin in 2027 and commercial operations launching by 2029.

“As green ammonia projects move from ambition to execution, operational flexibility becomes increasingly important,” Yassir Ghiyati, chief commercial officer at Topsoe, added in a news release. “We’re proud to support First Ammonia with technology designed to enable efficient and reliable green ammonia production. We look forward to continuing to work with the First Ammonia team to help bring this important U.S project to life.”

NASA and Houston researcher tackle climate-driven water quality risks

water watch

Climate change means far more to public health than living with hotter days. Transformations in our weather are contributing to challenges in accessing safe drinking water in some communities.

One of the most dire situations is along the US–Mexico border. The National Aeronautics and Space Administration (NASA) is seeking to address that issue with its Water Quality Applications program. An 11-researcher project led by a UTHealth Houston School of Public Health faculty member has been selected to participate.

“Drinking water is one of the most fundamental public health protections, but producing safe drinking water involves a delicate balance,” Yun Hang, assistant professor of environmental and occupational health sciences, said in a news release. Her team’s proposal was one of 93 that were submitted for funding through NASA’s Research Opportunities in Space and Earth Sciences (ROSES)-2025 program.

This is the first time that NASA has worked with a team devoted to water quality applications. The group, which includes researchers from across the nation, will use satellite observations of Earth, as well as hydrologic modeling, to potentially anticipate and act on water quality conditions as they change. Challenges addressed over the course of the three-year program, which kicked off in June, might include problems with water quality due to climate variability and increased pressure on water resources.

Hang’s team will focus on a pair of borderlands: Paso del Norte and the Rio Grande Valley.

“Working closely with El Paso Water ensures that our research addresses real operational needs while helping utilities better prepare for climate-related water quality changes and continue providing safe drinking water to communities across the Texas border region,” Hang added in the release.

She and the team will use data gathered by NASA on both past and future Earth-observing missions, which will allow them to track environmental changes that may affect source water quality. Combined with past water treatment records and hydrologic models, the team will also utilize artificial intelligence to develop predictive tools that aim to stop issues before they become larger hurdles to water safety.

Another one of the project’s goals is to create visualization tools and source water summaries that can be utilized by those without scientific expertise. The tools will be produced in English and Spanish to further broaden their accessibility.

The hope is that the materials made by the team will also go far beyond the border, with protocols that can be adapted or adopted by other areas dealing with water quality issues.

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This article originally appeared on our sister site, InnovationMap.com.

New research reveals what really drives data center location decisions

Guest Column

Recent power outages and the surge in AI-driven computing have made data center siting decisions more consequential than ever, especially as energy and water constraints tighten. Communities invest public dollars on the promise of jobs and growth, while firms weigh long-term commitments to land, power and connectivity.

Against that evolving backdrop, a critical question comes into focus: Where do data centers get built — and what actually drives those decisions?

A new study by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard Business School) provides the first large-scale statistical analysis of data center location strategies across the United States. It offers policymakers and firms a clearer starting point for understanding how different types of data centers respond to economic and strategic incentives.

Published in the journal Strategy Science, the study examines two major types of infrastructure: third-party colocation centers that lease server space to multiple firms, and hyperscale cloud centers owned by providers like Amazon, Google and Microsoft.

Key takeaways:

  • Third-party colocation centers are physical facilities in close proximity to firms that use them, while cloud providers operate large data centers from a distance and sell access to virtualized computing resources as on‑demand services over the internet.
  • Hospitals and financial firms often require urban third-party centers for low latency and regulatory compliance, while batch processing and many AI workloads can operate more efficiently from lower-cost cloud hubs.
  • For policymakers trying to attract data centers, access to reliable power, water and high-capacity internet matter more than tax incentives.

What are the two main data center location strategies?

The study draws on pre-pandemic data from 2018 and 2019, a period of relative geographic stability in supply and demand. This window gives researchers a clean baseline before remote work, AI demand and new infrastructure pressures began reshaping internet traffic patterns.

The findings show that data centers follow a bifurcated geography:

  • Third-party centers cluster in dense urban markets, where buyers prioritize proximity to customers despite higher land and operating costs.
  • Cloud providers, by contrast, concentrate massive sites in a small number of lower-density regions, where electricity, land and construction are cheaper and economies of scale are easier to achieve.

Third-party data centers, in other words, follow demand. They locate in urban markets where firms in finance, healthcare and IT value low latency, secure storage, and compliance with regulatory standards.

Using county-level data, the researchers modeled how population density, industry mix and operating costs predict where new centers enter. Every U.S. metro with more than 700,000 residents had at least one third-party provider, while many mid-sized cities had none.

Map of data centers

This pattern challenges common assumptions. Third-party facilities are more distributed across urban America than prevailing narratives suggest.

“For industries where speed is everything, being too far from the physical infrastructure can meaningfully affect performance and risk,” Pan Fang says. “Proximity isn’t optional for sectors that can’t absorb delay.”

In critical operations, even slight pauses can have real consequences. For hospital systems, lag can affect performance and risk exposure. And in high-frequency trading, milliseconds can determine whether value is captured or lost in a transaction.

Why does distance matter for cloud data center costs?

For cloud providers, the picture looks very different. Their decisions follow a logic shaped primarily by cost and scale. Because cloud services can be delivered from afar, firms tend to build enormous sites in low-density regions where power is cheap and land is abundant.

These facilities can draw hundreds of megawatts of electricity and operate with far fewer employees than urban centers. “The cloud can serve almost anywhere,” Pan Fang says, “so location is a question of cost before geography.”

The study finds that cloud infrastructure clusters around network backbones and energy economics, not talent pools. Well-known hubs like Ashburn, Virginia — often called “Data Center Alley” — reflect this logic, having benefited from early network infrastructure that made them natural convergence points for digital traffic.

Local governments often try to lure data centers with tax incentives, betting they will create high-tech jobs. But the study suggests other factors matter more to cloud providers, including construction costs, network connectivity and access to reliable, affordable electricity.

When cloud centers need a local presence, distance can sometimes become a constraint. Providers often address this by working alongside third-party operators. “Third-party centers can complement cloud firms when they need a foothold closer to customers,” Pan Fang says.

That hybrid pattern — massive regional hubs complementing strategic colocation — may define the next phase of data center growth.

Looking ahead, shifts in remote work, climate resilience, energy prices and AI-driven computing may reshape where new facilities go. Some workloads may move closer to users, while others may consolidate into large rural hubs. Emerging data-sovereignty rules could also redirect investment beyond the United States.

“The cloud feels weightless,” Pan Fang says, “but it rests on real choices about land, power and proximity.”

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This article originally appeared on Rice Business Wisdom. Written by Scott Pett. Pan Fang and Greenstein (2025). “Where the Cloud Rests: The Economic Geography of Data Centers,” Strategy Science.

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