Data centers are booming in the Chicago area, transforming the region into a major player in the industry. Experts predict 30 data center projects over the next five years, fueled by the increasing demands of AI and other advanced technologies. This growth translates to significant economic benefits: billions of dollars in investment, thousands of construction jobs, and revitalization of vacant properties. The reliability of Chicago’s power grid, its central location, and lack of extreme heat are major selling points for companies like T5 Data Centers, which recently broke ground on a large facility in Northlake.
This surge in data center development is supported by both state and city incentives, as well as a business-friendly environment in Illinois. The state’s 2019 data center investment program offers tax exemptions, further stimulating growth. The impact is substantial: Chicago absorbed a record 346 megawatts in the first half of 2024, totaling 1,279 megawatts currently in operation—an amount comparable to a nuclear power plant’s output. This has made Chicago one of the top 10 U.S. markets for data centers, with a low vacancy rate of 2%.
However, this rapid expansion also raises concerns. The increased demand for power and infrastructure could lead to higher utility bills for consumers. While ComEd emphasizes its commitment to serving all customers and improving grid reliability, the potential for price hikes remains a concern. The utility company is investing in infrastructure upgrades to meet the growing demand, but the speed of these upgrades depends on the scale of the requests and existing infrastructure in the area. Citizen’s Utility Board (CUB) advocates for policies that ensure consumers don’t unfairly bear the costs of speculative data center projects. They are urging regulators to distinguish between confirmed and prospective projects to avoid unnecessary infrastructure build-outs.
Several projects are already underway, breathing new life into former industrial sites. These include the transformation of the former Sears headquarters in Hoffman Estates into a massive data center campus and the repurposing of the former Cboe Global Markets headquarters in Chicago. While converting existing buildings into data centers presents challenges, it offers a valuable opportunity to revitalize underutilized spaces. Despite the potential challenges, the outlook for the data center industry in Chicago remains positive, driven by strong partnerships, reliable infrastructure, and a supportive business environment.