Data Center 2025: Speculation, Pricing Shocks, And The Rise of Tier-2 Markets

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If you’re trying to secure data center space right now, here’s the reality: You’re probably out of luck for the next two years, and what little is available will cost you significantly more than you budgeted.

But industry experts warn the situation may be artificially inflated. “Artificial scarcity is now a structural feature of global data center markets, not just a side effect of real demand,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. He warns of a “braggawatt” phenomenon where developers file for massive power capacities without confirmed builds.

“The market is behaving more like real estate: Capacity is pre-booked, traded, or flipped, often before a shovel hits the ground,” Gogia noted.

“The era of flat-rate data center pricing is over,” said Gogia. “This is not a transient cost wave, it is a foundational repricing of enterprise infrastructure.” AI workloads now draw three to four times the power per rack of traditional compute, and power access has become the primary constraint.

For Gogia, “Tier-2 markets like Des Moines, Columbus, and Richmond are now more than overflow zones, they’re strategic growth anchors.” Three shifts have elevated these markets: maturing fiber grids, direct renewable power access, and hyperscaler-led cluster formation.

“AI workloads, especially training and archival, can absorb 10-20ms latency variance if offset by 30-40% cost savings and assured uptime,” said Gogia. “Des Moines and Richmond offer better interconnection diversity today than some saturated Tier-1 hubs.”

As quoted in NetworkWorld.com, in an article authored by Gyana Swain published on June 27, 2025.

Beyond the Media Quote: Our View, In Full

Pressed for time? You can focus solely on the Greyhound Flashpoints that follow. Each one distills the full analysis into a sharp, executive-ready takeaway — combining our official Standpoint, validated through Pulse data from ongoing CXO trackers, and grounded in Fieldnotes from real-world advisory engagements.

Is ‘Data Centre Flipping’ Creating Artificial Scarcity in Global Capacity Markets?

Greyhound Flashpoint — Artificial scarcity is now a structural feature of global data centre markets—not just a side effect of real demand. Per Greyhound CIO Pulse 2025, 58% of enterprise CIOs suspect speculative intermediaries are pre-booking colocation capacity, distorting visibility for legitimate buyers. Utilities confirm that power requests outstrip feasible builds by 5–10x in some regions. Greyhound Research warns that unless enterprises build forensic clarity into provider vetting, they risk overpaying for capacity that was never truly scarce to begin with.

Greyhound Standpoint — According to Greyhound Research, the global data centre industry is caught in a paradox: skyrocketing demand alongside speculative gridlock. Developers and hyperscalers are filing for massive interconnection capacities—sometimes several gigawatts—without confirmed builds. This ‘braggawatt’ phenomenon has triggered a trust deficit, with enterprise buyers unable to distinguish genuine supply constraints from strategic inventory hoarding. The market is behaving more like real estate: capacity is pre-booked, traded, or flipped, often before a shovel hits the ground. Enterprises must treat colocation procurement with the same forensic diligence as M&A—auditing upstream ownership, power permits, and lease reassignments. Failure to do so risks entrapment in an artificial scarcity loop.

Greyhound Pulse — Per Greyhound CIO Pulse 2025, 42% of enterprise CIOs globally now mandate supply-chain transparency in co-location contracts—up from 19% in 2023. Nearly 63% cite difficulty in confirming whether ‘available’ rack space is genuinely shovel-ready or merely speculative. This sentiment is most pronounced in hyperscaler-heavy markets like Northern Virginia, where vacancy rates have dropped below 1% while over 80% of under-construction capacity is already pre-leased through 2027. These distorted market signals are driving CIOs to embed capacity audits directly into RFPs and due diligence workflows.

Greyhound Fieldnote — Per a recent Greyhound Fieldnote from a U.S.-based logistics conglomerate, the enterprise cancelled a planned move into a Tier-1 colocation facility in Virginia after uncovering that the listed availability was based on a power interconnect filed—but not yet approved. The operator had ‘leased’ the space via a third-party reseller contingent on a speculative power grant. The CIO escalated the issue to procurement, who re-scoped the rollout using a hybrid cloud approach across Richmond and North Carolina, locking in confirmed MW. This exposed the fragility of market perception in high-demand zones and reinforced the need for cross-functional vetting before contract signature.

How Should CFOs Budget for 15–18% Data Centre Price Surges?

Greyhound Flashpoint — The era of flat-rate data centre pricing is over. Per Greyhound CFO Pulse 2025, 61% of enterprise CFOs are now modelling 20–25% compound increases in infrastructure costs over the next three years—driven by AI density, energy costs, and hyperscaler-induced supply compression. Northern Virginia, Chicago, and Hillsboro have already seen 15–46% annual price hikes. Greyhound Research believes these are not anomalies—they are the early symptoms of a structural reset in data infrastructure economics.

Greyhound Standpoint — According to Greyhound Research, this is not a transient cost wave—it is a foundational repricing of enterprise infrastructure. AI workloads now draw 3–4x the power per rack of traditional compute. Meanwhile, power access and build timelines are becoming the new constraints, not hardware. Data centre operators are repricing to account for delayed grid interconnects, skyrocketing transformer costs, and the capital costs of GPU-grade buildouts. CFOs must abandon legacy budget models anchored to 10–15% of IT spend and instead pivot to scenario-based allocations that dynamically adjust for workload intensity, geography, and energy exposure. The question is no longer “what does capacity cost?”—it’s “what does capacity enable, and at what risk if deferred?”

Greyhound Pulse — According to Greyhound CFO Pulse 2025, 74% of CFOs at global enterprises have revised their data centre allocation frameworks in the past 12 months. Of those, 47% now allocate >18% of total IT budgets to infrastructure—particularly in sectors with AI-intensive transformation roadmaps. Nearly a third of respondents noted they had to renegotiate multi-year leases in 2024 due to cost volatility. Pricing escalators linked to energy indices, workload tiers, and zone-specific congestion are now standard in Tier-1 markets. Only 22% of firms report confidence in holding infrastructure spend below 15% of IT budgets for the next three years.

Greyhound Fieldnote — Per a recent Greyhound Fieldnote from a France-based pharma multinational, the finance and infrastructure teams collaborated to restructure an €80 million data centre budget across three continents. While North Virginia and Frankfurt saw unit costs spike, a strategic shift to Montreal and Des Moines allowed the firm to maintain redundancy while shaving 14% off projected spend. However, latency testing revealed service degradation in AI inference workloads, prompting a co-location–cloud hybrid fix. The CFO has since instituted a dynamic rate model that treats data centre zones like commodities—indexed to power, latency tolerance, and AI density factors.

Are Tier-2 Markets Now Ready for Enterprise AI and Core Workloads?

Greyhound Flashpoint — Tier-2 markets like Des Moines, Columbus, and Richmond are now more than overflow zones—they’re strategic growth anchors. Per Greyhound CTO Pulse 2025, 49% of tech leaders are actively relocating AI and storage-intensive workloads to secondary regions citing power stability, cost arbitrage, and tax incentives. Greyhound Research believes Tier-2 is no longer a fallback—it’s an optimisation layer in enterprise architecture, provided companies apply structured evaluation frameworks around network diversity and SLA tolerances.

Greyhound Standpoint — According to Greyhound Research, three shifts have elevated Tier-2 markets into first-tier considerations: maturing fibre grids, direct renewable power access, and hyperscaler-led cluster formation. AI workloads—especially training and archival—can absorb 10–20ms latency variance if offset by 30–40% cost savings and assured uptime. Enterprises must move beyond legacy perceptions of latency bottlenecks and instead benchmark regions by capacity headroom, power diversity, and resilience. Des Moines and Richmond offer better interconnection diversity today than some saturated Tier-1 hubs. When evaluated through a composite lens—cost, carbon, and continuity—Tier-2 is fast becoming a default choice for energy-sensitive deployments.

Greyhound Pulse — Greyhound CTO Pulse 2025 indicates that 53% of enterprises deploying in Tier-2 zones now run pre-deployment latency and network failover simulations as standard practice. Nearly 34% are actively shifting AI training workloads to these locations, while keeping inference and transactional systems closer to end-users. Des Moines and Columbus lead in new deployments due to superior grid reliability and favourable zoning for energy-intensive builds. More than half of respondents reported effective TCO reductions of 20% or more compared to their Tier-1 strategies, even after accounting for interconnection upgrades.

Greyhound Fieldnote — Per a recent Greyhound Fieldnote from a U.S.-based retail conglomerate, the CTO piloted a simulation AI model for supply chain optimisation from a new facility in Columbus, Ohio. While the team reported a 27% TCO advantage over a similar deployment in Ashburn, an unanticipated network disruption due to a single-path fibre route led to a six-hour model training delay. As a result, the organisation now mandates all Tier-2 sites include dual carrier-neutral points of presence and multi-path fibre access. This experience transformed the firm’s infrastructure playbook, formalising a ‘Tier-2 Viability Index’ into their data centre procurement policy.

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