AI Data Centers Could Help Bridge Rural America's Digital Divide

Millions of households across rural America don't have access to the high-speed internet necessary to fully participate in the modern economy, but the emergence of data center development in new areas to support artificial intelligence could play a key role in filling those gaps. 

Even as the rapid adoption of AI technologies makes the present feel increasingly like a future imagined in science fiction, the only internet available in many U.S. rural communities is decades out of date. One in five rural households lack access to broadband, according to the Federal Communications Commission, meaning that for large swaths of the country the internet means dial-up speeds over obsolete networks that can’t support ubiquitous applications like Zoom or streaming video.

Poor connectivity costs rural communities billions of dollars in economic growth, studies have found. 

For some of these communities, the construction of large-scale data centers nearby may be the catalyst that ultimately helps bridge this digital divide.

From coastal Oregon to central Mississippi, tech giants like Microsoft, Amazon, Google and Meta are building and leasing data center campuses in remote locations that would never have been considered just 18 months ago — a geographic shift driven in part by the computing needs of AI. These rural data center projects are accompanied by massive investments to build optical fiber arteries needed to connect them back to major population centers.

In bringing this critical infrastructure to rural areas, data centers can dramatically reduce the economic barriers that have led broadband providers to steer clear of these communities. 

“I don't think just because a big data center gets built out in a cornfield near an underserved area that all of a sudden everyone’s going to have high-speed internet, but it's an important building block because you need that fiber backbone,” said Patton Lochridge, chief commercial officer at fiber provider Bandwidth IG. “It creates a critical asset that has to exist in order for anybody to be willing to spend the capital to build out fiber to the last mile.”

The dwindling availability of power and developable land in most large U.S. data center markets is forcing tech giants and third-party data center providers to look significantly farther afield as they scramble to expand capacity to meet record demand for cloud services and AI applications. 

This has meant a growing pipeline of massive projects in former data center hinterlands like Madison County, Mississippi, where Amazon Web Services announced plans last month to spend $10B building a pair of campuses. AWS has also unveiled a number of billion-dollar data center projects over the past year in rural areas throughout Virginia like Louisa, Culpeper and Caroline counties that have little or no previous data center presence. 

At the same time, Microsoft is building a 350-acre campus 70 miles outside Atlanta in Rome, Georgia, while Switch is reportedly building a hyperscale facility a few miles away in the town of Cartersville. Social media giant Meta is also building out AI-focused data centers in locations like Kuna, Idaho, and Jeffersonville, Indiana, that are far from major metro areas or primary digital infrastructure hubs. 

These locations may all have an ample supply of cheap power and available land, but many were never on the data center development radar because they sit far from existing optical fiber routes: the information highways carrying data in the form of pulses of light between data center clusters and major population centers.

Building out a new fiber route is a major infrastructure project. It’s expensive and time-consuming, and until recently tech companies and data center providers found it rarely made sense to develop facilities where major fiber projects were required when developable land was available in existing industry hubs with robust fiber networks. 

But the combination of skyrocketing demand and power constraints in those industry hubs has changed that math. Tech giants and developers are increasingly deciding it is worth it to build out extensive new fiber routes to develop more far-flung data center sites. In doing so, either themselves or through partnerships with fiber providers like Bandwidth IG and Zayo, they are bringing so-called fiber backbones into regions served only by obsolete telecom systems where the absence of this kind of critical infrastructure has resulted in some of the country’s least connected communities. 

Indeed, AWS’s planned projects in Madison County, Mississippi represents a massive digital infrastructure investment in a state ranked 45th for broadband availability. In neighboring Yazoo and Scott counties, fewer than two-thirds of households have access to the minimum internet speeds needed for basic applications like streaming HD video, while large swaths of the region have no internet connectivity at all outside of expensive satellite services, according to FCC data. 

If fiber networks are the roadways that form the internet, rural hyperscale campuses are building freeways into areas that previously had nothing but single-lane dirt roads. 

“AWS data centers require fiber connectivity, and we partner with local or regional carriers to build fiber infrastructure where it did not previously exist,” AWS Vice President for Global Network Connectivity Robert Kennedy said in an email to Bisnow. “When we work with these carriers to build fiber infrastructure, we expect members of the community to benefit from increased digital access to support things like broadband, mobile, and more.”

Just because this fiber highway exists does not automatically mean that underserved communities nearby immediately have onramps onto it.

An internet service provider, local municipality or other “last mile” telecommunications firm still has to make a deal to connect to the fiber backbone and physically build out their own local networks to reach homes and businesses in underserved communities, with a business case that will allow them to offer broadband service to a relatively small group of customers at an accessible price point. 

But the introduction of one or more major fiber backbones to serve a data center takes care of one of the primary capital expenses that often made bringing broadband into small rural communities a money-losing proposition, data center experts say. Even where there’s some preexisting fiber infrastructure, the addition of new fiber for data centers can drive down the rates local last-mile providers have to pay to access that backbone by shifting the supply and demand dynamic and creating competition. 

Add to the mix significant federal subsidies for last mile fiber like the Broadband Equity, Access and Deployment program created through 2021’s infrastructure bill, and all of a sudden bringing broadband into unconnected rural communities can start to make good business sense. 

“That business case becomes more palatable with a new backbone capability in and out of the market anchored by a data center campus,” Bandwidth IG’s Lochridge said. “Before it wouldn't have been worth it because they'd have to construct an entire backbone asset all the way back to a major population center, but if that backbone’s there it can incentivize local providers or new entrants that want to get into the unserved and underserved markets by leveraging [federal] funding or BEAD money to further subsidize the build-outs.”

An example of this dynamic can be seen in Tillamook County, Oregon, where AWS and Astound Communications are installing a new 100-mile fiber route to connect its Hillsboro data center cluster to a landing station for the Bifrost subsea cable system. Like many rural counties, Tillamook has a disproportionate number of households with little or no internet access. More than 1,000 residents in the county have no access to wired internet service at all, while a 2021 survey found that only a quarter of respondents had adequate internet service to work from home or attend school virtually during the pandemic. 

AWS’s new fiber line has served as a catalyst for improved connectivity, according to Oregon State Senator Suzanne Weber, whose district includes Tillamook County. As a result of this fiber build, Verizon is constructing cell towers to bring connectivity to what had been a 39-mile dead zone, while broadband will be made available to hundreds of additional homes. 

“The availability of high-speed, high-capacity wired service means installing cellular antennas will be relatively simple and affordable compared to what would have been necessary before,” Weber wrote in a letter to constituents. “[The Project] will provide ‘last mile’ connectivity that will bring the kind of high-speed internet service businesses and homeowners rely on throughout the Portland metro area directly to the property lines of 273 homeowners who currently have no such service here in Tillamook County.”

Meta has also touted its role in improving broadband access in rural communities through the development of its data centers and the fiber to support them, particularly in Indiana. In 2021, the social media giant built a 165-mile fiber route bisecting the state to connect its existing and planned data center sites. Meta says it is actively leveraging this infrastructure to try to push broadband into rural communities on the other side of the digital divide. 

“We intend to partner with local and regional providers in Indiana,” the company wrote in a blog post. “This will enable them to obtain network capacity, so they can extend broadband access for people — particularly in underserved rural areas near our fiber networks. “