How Much Does Colocation Cost in 2026?

Colocation pricing in 2026 reflects a market transformed by AI demand. Traditional colocation costs have remained relatively stable, but high-density GPU hosting has created a new premium tier. This guide covers all colocation cost components — from basic cabinet rental to full GPU cluster hosting — so you can accurately budget for your infrastructure needs.

Standard Colocation Pricing Overview

For traditional IT workloads (5-15 kW per rack), colocation pricing in 2026 typically ranges:

• Per-kW pricing: $100-250/kW/month depending on market and provider
• Full cabinet (42U): $800-3,000/month at 5-10 kW
• Half cabinet (21U): $400-1,500/month
• Quarter cabinet (10U): $200-800/month

Pricing by Market

Location is the biggest driver of colocation pricing. Here's how major US markets compare:

Northern Virginia (Ashburn)

• Standard: $130-220/kW/month
• High-density: $200-380/kW/month
• Power: $0.10-0.14/kWh
• Notes: Premium pricing due to connectivity advantages, power constraints driving prices up

Dallas-Fort Worth, Texas

• Standard: $100-180/kW/month
• High-density: $150-300/kW/month
• Power: $0.06-0.09/kWh
• Notes: Most affordable major market. 20-30% cheaper than NoVA for comparable facilities

Phoenix, Arizona

• Standard: $100-180/kW/month
• High-density: $150-280/kW/month
• Power: $0.06-0.09/kWh
• Notes: Competitive pricing with DFW, growing market with solar energy advantages

Chicago

• Standard: $110-200/kW/month
• High-density: $170-320/kW/month
• Power: $0.08-0.12/kWh
• Notes: Premium for downtown/carrier hotel facilities, suburban pricing more competitive

Silicon Valley / Bay Area

• Standard: $150-280/kW/month
• High-density: $250-450/kW/month
• Power: $0.14-0.20/kWh
• Notes: Most expensive major market. Power costs significantly impact total cost of ownership

What's Included in Colocation Pricing

Typically Included

• Physical space (rack or cage)
• Power delivery to your rack (up to committed amount)
• Cooling (standard air cooling)
• Physical security (biometric access, cameras, guards)
• Basic remote hands (1-2 hours/month)
• Fire suppression systems
• Environmental monitoring

Typically Extra

• Network cross-connects: $200-500/month each
• Internet bandwidth: $1-5/Mbps/month committed
• Cloud on-ramps: $500-1,500/month per connection
• Additional remote hands: $75-150/hour
• Managed services: $500-5,000/month
• High-density cooling surcharges: varies
• IP addresses: $5-15/month per IP

GPU and AI Colocation Premium

AI workloads have created a distinct pricing tier in colocation. The premium reflects higher power density, specialized cooling requirements, and the infrastructure investment required to support GPU deployments.

• GPU-ready racks (40+ kW): $200-450/kW/month — a 50-100% premium over standard pricing
• Liquid cooling surcharge: $1,000-4,000/rack/month additional
• InfiniBand connectivity: Custom pricing, often $500-2,000/month per rack for fabric access

For detailed GPU-specific pricing, see our GPU colocation pricing guide.

Pricing Trends in 2026

What's Going Up

• Power costs: Utility rates are increasing 3-8% annually in most markets
• High-density pricing: AI demand is creating a supply shortage of liquid-cooled capacity, driving premiums higher
• Premium markets: Northern Virginia and Silicon Valley are seeing above-average price increases

What's Going Down

• Standard density pricing: New supply from hyperscale builds is creating competition for traditional workloads
• Emerging markets: Markets like Phoenix and Salt Lake City offer increasingly competitive pricing as capacity grows
• Bandwidth: Per-Mbps pricing continues to decline year-over-year

How to Get the Best Pricing

• Get multiple quotes: Prices vary 30-50% between providers in the same market. Always compare.
• Commit to longer terms: 2-3 year contracts save 15-25% over month-to-month
• Right-size your power: Don't overcommit on power — you pay for allocated capacity whether you use it or not
• Bundle services: Combining colo with bandwidth and cross-connects often yields better total pricing
• Consider secondary markets: If latency allows, markets like Phoenix or Salt Lake City offer significant savings vs tier-1 markets
• Negotiate power pass-through: For large deployments, negotiate actual utility cost pass-through instead of fixed per-kW pricing

Colocation vs Cloud Cost Comparison

For traditional IT, colocation typically becomes cheaper than cloud at scale (10+ racks, 60%+ utilization). For AI workloads, the economics shift even more dramatically in favor of colocation. See our detailed colocation vs cloud comparison for AI-specific cost analysis.

Hidden Costs to Watch For

• Power overages: Exceeding committed power can incur 1.5-2x overage rates
• Cross-connect fees: Each network connection adds $200-500/month — they add up quickly
• Shipping and receiving: Some providers charge $50-200 per delivery
• Early termination: Breaking a contract can cost 50-100% of remaining term value
• Power factor penalties: Poor power factor can result in surcharges
• Escalation clauses: Some contracts include annual price increases of 2-5%

Use our data center directory to compare facilities and request quotes. For AI-specific deployments, start with our AI-ready facility list.