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South Dakota's Data Centers: Leveraging AI for Competitive Growth

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South Dakota’s AI-Driven Data Centers Boost Growth | Data Center Innovation

Business Honor
10 December, 2025

Experts advocate for expanding data centers in South Dakota, harnessing AI to boost business potential and sustainability.

While Sioux Falls is already home to a number of data centers that focus on business, including Midco and SDN, experts feel that South Dakota would benefit from more data centers focusing on business and that AI can be leveraged to help the state compete at a higher level. “When I talk to business leaders about how AI can benefit them, it isn’t as if we are talking about small improvements over time, there are significant improvements that a company can realize. If you do not capitalize on these opportunities, your competitors will capitalize on these opportunities and leave you in the dust,” said Sam South, Director of Analytics Innovation at Microsoft.

In terms of technology, people utilize a data centre on a daily basis and likely utilize data centres without even being aware of it as technology continues to develop. “As technology continues to evolve, we will see increased demand for technology, which means the data, must be stored somewhere. As a result, we have asked why we shouldn’t take advantage of some of that opportunity in South Dakota.,” said Kyle Peters, Partner at 1776 Group.

The 2023 Pew Research Report states that data centres in the United States consumed 17 billion gallons of water this past year. However, according to Ryan Punt, CEO of SDN Communications, "That number isn't even close to what we use at our facility, which is about 7 CFU of water, or about as much as Kyle's family uses." Punt added, "I have daughters, and I know we probably use more than that already." This means that while SDN operates a closed-loop water usage system within a 900,000-square-foot building, it does not vary greatly compared to houses in South Dakota. SDN representatives suggest that there remains a pathway forward for attracting more of these types of operations to South Dakota without affecting the quality of life in surrounding communities and using a significant amount of energy.