Your data center is either closer than you think or much farther away

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A map of U.S. data centers. Courtesy of Rice Businesses Wisdom

A new study shows why some facilities cluster in cities for speed and access, while others move to rural regions in search of scale and lower costs. Based on research by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard).

Key findings:

  • Third-party colocation centers are physical facilities in close proximity to firms that use them, while cloud providers operate large data centers from a distance and sell access to virtualized computing resources as on‑demand services over the internet.
  • Hospitals and financial firms often require urban third-party centers for low latency and regulatory compliance, while batch processing and many AI workloads can operate more efficiently from lower-cost cloud hubs.
  • For policymakers trying to attract data centers, access to reliable power, water and high-capacity internet matter more than tax incentives.

Recent outages and the surge in AI-driven computing have made data center siting decisions more consequential than ever, especially as energy and water constraints tighten. Communities invest public dollars on the promise of jobs and growth, while firms weigh long-term commitments to land, power and connectivity.

Against that backdrop, a critical question comes into focus: Where do data centers get built — and what actually drives those decisions?

A new study by Tommy Pan Fang (Rice Business) and Shane Greenstein (Harvard Business School) provides the first large-scale statistical analysis of data center location strategies across the United States. It offers policymakers and firms a clearer starting point for understanding how different types of data centers respond to economic and strategic incentives.

Forthcoming in the journal Strategy Science, the study examines two major types of infrastructure: third-party colocation centers that lease server space to multiple firms, and hyperscale cloud centers owned by providers like Amazon, Google and Microsoft.

Two Models, Two Location Strategies

The study draws on pre-pandemic data from 2018 and 2019, a period of relative geographic stability in supply and demand. This window gives researchers a clean baseline before remote work, AI demand and new infrastructure pressures began reshaping internet traffic patterns.

The findings show that data centers follow a bifurcated geography. Third-party centers cluster in dense urban markets, where buyers prioritize proximity to customers despite higher land and operating costs. Cloud providers, by contrast, concentrate massive sites in a small number of lower-density regions, where electricity, land and construction are cheaper and economies of scale are easier to achieve.

Third-party data centers, in other words, follow demand. They locate in urban markets where firms in finance, healthcare and IT value low latency, secure storage, and compliance with regulatory standards.

Using county-level data, the researchers modeled how population density, industry mix and operating costs predict where new centers enter. Every U.S. metro with more than 700,000 residents had at least one third-party provider, while many mid-sized cities had none.

ImageThis pattern challenges common assumptions. Third-party facilities are more distributed across urban America than prevailing narratives suggest.

Customer proximity matters because some sectors cannot absorb delay. In critical operations, even slight pauses can have real consequences. For hospital systems, lag can affect performance and risk exposure. And in high-frequency trading, milliseconds can determine whether value is captured or lost in a transaction.

“For industries where speed is everything, being too far from the physical infrastructure can meaningfully affect performance and risk,” Pan Fang says. “Proximity isn’t optional for sectors that can’t absorb delay.”

The Economics of Distance

For cloud providers, the picture looks very different. Their decisions follow a logic shaped primarily by cost and scale. Because cloud services can be delivered from afar, firms tend to build enormous sites in low-density regions where power is cheap and land is abundant.

These facilities can draw hundreds of megawatts of electricity and operate with far fewer employees than urban centers. “The cloud can serve almost anywhere,” Pan Fang says, “so location is a question of cost before geography.”

The study finds that cloud infrastructure clusters around network backbones and energy economics, not talent pools. Well-known hubs like Ashburn, Virginia — often called “Data Center Alley” — reflect this logic, having benefited from early network infrastructure that made them natural convergence points for digital traffic.

Local governments often try to lure data centers with tax incentives, betting they will create high-tech jobs. But the study suggests other factors matter more to cloud providers, including construction costs, network connectivity and access to reliable, affordable electricity.

When cloud centers need a local presence, distance can sometimes become a constraint. Providers often address this by working alongside third-party operators. “Third-party centers can complement cloud firms when they need a foothold closer to customers,” Pan Fang says.

That hybrid pattern — massive regional hubs complementing strategic colocation — may define the next phase of data center growth.

Looking ahead, shifts in remote work, climate resilience, energy prices and AI-driven computing may reshape where new facilities go. Some workloads may move closer to users, while others may consolidate into large rural hubs. Emerging data-sovereignty rules could also redirect investment beyond the United States.

“The cloud feels weightless,” Pan Fang says, “but it rests on real choices about land, power and proximity.”

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This article originally appeared on Rice Business Wisdom. Written by Scott Pett.

Pan Fang and Greenstein (2025). “Where the Cloud Rests: The Economic Geography of Data Centers,” forthcoming in Strategy Science.

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Search trends predict future retail revenue up to three quarters in advance. Photo via Pexels

Forecasting retail sales just got smarter, thanks to Google searches

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Imagine being able to predict the future of retail sales — not with months-old economic reports, but with real-time digital breadcrumbs left behind by consumers. Thanks to new research from K. Ramesh (Rice Business) and Gary Lind (University of Pittsburgh), that future is already here.

Key findings

  • Search trends predict future retail revenue — up to three quarters ahead.
  • Markets don’t fully price in search-based insights, especially before earnings announcements.
  • Trading strategies using search data outperform traditional asset-pricing models by 2–3%.
  • Analysts often underuse this data, resulting in predictable forecast errors.
  • At the macro level, search trends closely track — and often lead — official retail sales and GDP.

Their study shows that Google search trends are powerful predictors of consumer demand, capable of forecasting U.S. retail sales up to three quarters in advance. The implications span industries and audiences — from Wall Street traders to Main Street retailers, and from data-driven CFOs to curious business students.

A smarter, faster crystal ball for retail demand

Retail sales drive nearly 70% of U.S. gross domestic product (GDP), making them one of the most important indicators of economic health. Yet traditional forecasting relies heavily on backward-looking data and broad economic indicators. Ramesh and Lind’s work offers a leap forward: search data from Google Trends — publicly available and easy to use — can offer a faster, more precise signal of where sales are headed.

“If you want to understand consumer demand,” says Ramesh, the Herbert S. Autrey Professor of Accounting at Rice Business, “look at what people are searching for — not just what companies report after the fact. These digital footprints can tell us where revenue is going, often before the market catches up.”

This low-cost approach stands in stark contrast to expensive alternatives, such as satellite images of parking lots, in-store foot traffic from mobile data, or retail scanner feeds — tools often reserved for hedge funds and large institutional investors. Google Trends offers a scalable, accessible option for anyone seeking insight into consumer behavior.

Why this matters for investors and analysts

The researchers analyzed search patterns for nearly 200 publicly traded U.S. retail companies between 2004 and 2019. They found that firms with rising search volumes tend to report higher revenues — often well before analysts or investors react.

In fact, investment strategies built around these trends earned 2–3% higher returns than traditional models would predict. And most of these gains were concentrated around earnings announcements — a sign that markets were slow to recognize what search data had already revealed.

The advantage is even more striking for companies that fly under Wall Street’s radar. For firms with limited analyst coverage, the predictive power of search data on stock performance was more than 80% stronger.

A new tool for analysts — if they’ll use it

Despite the clear signal in the data, the study finds that analysts routinely fail to incorporate search-based insights into their forecasts. That gap translates into missed revenue predictions and market inefficiencies — which sophisticated investors can exploit.

“The search data are out there,” says Lind, a Rice Business Ph.D. ’19 graduate now on faculty at Pitt Business. “They’re public, powerful, and free. Analysts who ignore them are missing an opportunity.”

The impact of this research extends well beyond equity markets. By aggregating Google search data across the retail sector, the authors found strong alignment with U.S. Census retail sales figures and GDP trends. In other words, these digital signals reflect not just firm-level interest, but macroeconomic momentum.

A data wake-up call

This makes search trends a potentially valuable early-warning system for policymakers, central banks, and anyone responsible for interpreting the economic landscape. During volatile or uncertain periods, such tools could offer precious foresight into shifting consumer behavior.

In a digital era where consumers research before they shop — whether online or in-store — it’s no surprise that their Google queries leave valuable clues. What’s surprising is how often businesses, investors, and even economists still overlook them, Ramesh says. “Search data is a goldmine. And it's just sitting there, waiting to be used.”

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This article originally appeared on Rice Business Wisdom.

Lind and Ramesh, “Using Internet Search Data to Predict Aggregate Retail Sales and Enhance Firm-Level Revenue Expectations,” Contemporary Accounting Research (April 2025): 1-32. https://doi.org/10.1111/1911-3846.13043.

There's no crystal ball, but this researcher from Rice University is trying to see if some metrics work for economic forecasting. Photo via Getty Images

Houston researcher tries to crack the code on the Fed's data to determine economic outlook

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Research by Rice Business Professor K. Ramesh shows that the Fed appears to harvest qualitative information from the accounting disclosures that all public companies must file with the Securities and Exchange Commission.

These SEC filings are typically used by creditors, investors and others to make firm-level investing and financing decisions; and while they include business leaders’ sense of economic trends, they are never intended to guide macro-level policy decisions. But in a recent paper (“Externalities of Accounting Disclosures: Evidence from the Federal Reserve”), Ramesh and his colleagues provide persuasive evidence that the Fed nonetheless uses the qualitative information in SEC filings to help forecast the growth of macroeconomic variables like GDP and unemployment.

According to Ramesh, the study was made possible thanks to a decision the SEC made several years ago. The commission stores the reports submitted by public companies in an online database called EDGAR and records the IP address of any party that accesses them. More than a decade ago, the SEC began making partially anonymized forms of those IP addresses available to the public. But researchers eventually figured out how to deanonymize the addresses, which is precisely what Ramesh and his colleagues did in this study.

"We were able to reverse engineer and identify those IP addresses that belonged to Federal Reserve staff," Ramesh says.

The team ultimately assembled a data set containing more than 169,000 filings accessed by Fed staff between 2005 and 2015. They quickly realized that the Fed was interested only in filings submitted by a select group of industry leaders and financial institutions.

But if Ramesh and his colleagues now had a better idea of precisely which bellwether firms the Fed focused on, they still had no way of knowing exactly what Fed staffers had gleaned from the material they accessed. So the team decided to employ a measure called "tone" that captures the overall sentiment of a piece of text – whether positive, negative, or neutral.

Building on previous research that had identified a set of words with negatively toned financial reports, Ramesh and his colleagues examined the tone of all the SEC filings accessed by Fed staff between one meeting of the Federal Open Markets Committee (FOMC) and the next. The FOMC sets interest rates and guides monetary policy, and its meetings provide an opportunity for Fed officials to discuss growth forecasts and announce policy decisions.

The researchers then examined the Fed's growth forecasts to see if there was a relationship between the tone of the documents that Fed staff examined in the period between FOMC meetings and the forecasts they produced in advance of those meetings.

The team found close correlations between the tone of the reports accessed by the Fed and the agency’s forecasts of GDP, unemployment, housing starts and industrial production. The more negative the filings accessed prior to an FOMC meeting, for example, the gloomier the GDP forecast; the more positive the filings, the brighter the unemployment forecast.

Ramesh and his colleagues also compared the Fed's forecasts with those of the Society of Professional Forecasters (SPF), whose members span academia and industry. Intriguingly, the researchers found that while the errors in the SPF's forecasts could be attributed to the absence of the tonal information culled from the SEC filings, the errors in the Fed’s forecasts could not. This suggests both that the Fed was collecting qualitative information that the SPF was not—and that the agency was making remarkably efficient use of it.

"They weren’t leaving anything on the table," Ramesh says.

Having solved one mystery, Ramesh would like to focus on another; namely, how does the Fed identify bellwether firms in the first place?

Unfortunately, the SEC no longer makes IP address data publicly available, which means that Ramesh and his colleagues can no longer study which companies the Fed is most interested in. Nonetheless, Ramesh hopes to use the data they have already collected to build a model that can accurately predict which firms the Fed is most likely to follow. That would allow the team to continue studying the same companies that the Fed does, and, he says, “maybe come up with a way to track those firms in order to understand how the economy is going to move.”

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This article originally ran on Rice Business Wisdom and was based on research from K. Ramesh is Herbert S. Autrey Professor of Accounting at Jones Graduate School of Business at Rice University.

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University of Houston debuts UH Health, expanding collaborative health care and research efforts

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The University of Houston has announced its cross-disciplinary academic venture, UH Health.

It will align UH’s efforts in education, research and clinical partnerships to create new opportunities to advance research and innovation, community impact, and education, according to a news release.

“From opening the state’s first college of optometry to developing groundbreaking vaccines, improving the health of all Texans has been a UH priority for decades,” UH President Renu Khator said in the release. “Now, with the launch of UH Health, we are bringing together the full strength of our health enterprise to expand our reach, advance research and transform the future of health for our communities.”

UH is adopting a fully collaborative model, with health professionals from various concentrations to help better understand overall patient care, which includes factors like clinical, behavioral and social factors that can influence health outcomes.

UH Health will also have partnerships with HCA Healthcare, Memorial Hermann Hospital, Baylor College of Medicine, MD Anderson Cancer Center and other Texas Medical Center facilities. In addition, UH Health will work with DHR Health in the Rio Grande Valley to create new opportunities for health care education, workforce development and research in one of Texas' medically underserved regions.

As part of UH Health, UH Health Family Care Center will provide integrated primary care and mental health services to the University and its surrounding communities at affordable prices to serve the Third Ward, East End and South Houston. The Household-Centered Care program will give students opportunities to work directly with community caregivers through patient home visits, while the 3rd Ward Place of Wellness offers health screenings, preventive services, education and other resources designed to support long-term health and well-being, according to UH. The College of Optometry will continue to see children and families via outreach programs and clinics across the community.

UH Health also aims to address shortages in health care professionals, providing a pipeline from the university to the workforce. According to the Texas Hospital Association, 64 percent of hospitals in the state are operating with reduced services and fewer beds due to staff shortages.

“Preparing the next generation of health care leaders is one of the most important investments we can make in the future of our state,” Jonathan McCullers, vice president for health affairs at UH and dean of the Tilman J. Fertitta Family College of Medicine at UH, added in the release. “UH Health is ensuring our graduates are equipped to work effectively in today’s complex healthcare environment.”

Additionally, UH shared it is investing $77 million into a 55,000-square-foot medical research facility aimed at boosting interdisciplinary research and scientific discovery.

“Healthcare is no longer delivered in isolation, and complex health challenges require coordinated solutions,” McCullers added. “UH Health allows us to work across disciplines to tackle health challenges, advance research and improve outcomes for patients and our community.”

Report: Houston ranks among 10 most affordable metros to raise a child

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Raising a child is not an easy or inexpensive feat, but a new study has determined Houston parents have the 7th lowest childrearing costs in the country.

SmartAsset's new report, "Cost of Raising a Child in Major U.S. Metros – 2026 Study," calculated year-over-year changes in the annual cost of raising a child (factoring in childcare, additional housing costs, food, transportation, medical costs and other necessities) in the 48 largest U.S. metro areas. MIT's Living Wage Calculator was used to compare the living costs of a household with two working adults and one child to that of a childless household with two working adults.

Childrearing costs in Houston-Pasadena-The Woodlands have grown 3.37 percent since last year, totaling $22,605 for a family of three in 2026. That's $737 more than what it took to raise a child in 2025 and $1,209 higher than in 2024.

This is how SmartAsset broke down the annual cost for raising a child in the Houston area:

  • Cost of childcare: $10,265
  • Cost of food: $1,721
  • Other expenses: $10,619

Houston ranked 42nd in SmartAsset's national list of cities with the highest childrearing costs in 2026, making it the No. 7 most affordable U.S. metro.

San Francisco-Oakland-Fremont in California topped the list with the highest childrearing costs in the U.S., at $43,171. The cost for raising a child in this California metro soared nearly 11 percent higher since last year.

Memphis, Tennessee ranked dead last as the most affordable U.S. metro for raising a child in 2026. Families will spend less than $20,000 to raise a child in Memphis, only 3.24 percent more than what was needed in 2025.

Raising a child in other Texas metros
It may come as no surprise that Austin is the most expensive place to raise a child in Texas, and it appeared as the 31st most expensive U.S. metro for families. Parents will spend nearly $25,000 to raise a child in the state's capital city, which is $703 higher than it was a year ago.

Two other Texas metros join Houston among the top 10 most affordable U.S. metros for raising a family: San Antonio-New Braunfels (No. 3) and Dallas-Fort Worth-Arlington (No. 10). Childrearing costs in San Antonio add up to $21,393 annually, and Dallas-Fort Worth parents will spend $23,340 to raise their children in 2026.

The top 10 most affordable U.S. metros for raising a child in 2026 are:

  • No. 1 – Memphis, Tennessee ($19,922)
  • No. 2 – Nashville, Davidson-Murfreesboro-Franklin, Tennessee ($21,216)
  • No. 3 – San Antonio-New Braunfels ($21,393)
  • No. 4 – Birmingham, Alabama ($21,684)
  • No. 5 – Virginia Beach-Chesapeake-Norfolk, Virginia ($22,314)
  • No. 6 – Atlanta-Sandy Springs-Roswell, Georgia ($22,470)
  • No. 7 – Houston-Pasadena-The Woodlands ($22,605)
  • No. 8 – Richmond, Virginia ($22,658)
  • No. 9 – Louisville/Jefferson County, Kentucky ($23,270)
  • No. 10 – Dallas-Fort Worth-Arlington ($23,340)
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This article originally appeared on CultureMap.com.

Axiom Space expands executive team with two C-suite hires

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Fresh off officially making Texas its legal headquarters, Axiom Space has named two new C-level executives.

The Houston-based spacetech company, which is developing the first commercial space station, announced earlier this month that it had appointed Zach Gitomer as its new chief financial officer and Erick Wegerer as chief information officer.

Gitomer served as vice president of investor relations and capital markets for Axiom from March to June of this year. Before joining Axiom, he held various leadership roles at Bank of America, Merrill Lynch, and Citi, where he supported technology and growth companies, according to Axiom.

"Building era-defining space infrastructure and pioneering the orbital economy is a complex endeavor that requires not just an audacious vision and stellar engineering talent, but the financial infrastructure, discipline, and capital strategy to match," Gitomer shared in a LinkedIn post. "I’m honored to take on this role ... I’m looking forward to partnering with the exceptional leadership team here at Axiom Space during a defining chapter for the company and commercial spaceflight broadly, as well as a crucial period for maintaining U.S. human presence in low-Earth orbit and leadership in space exploration."

Wegerer joins Axiom after most recently serving as CIO of Washington-based Insitu Inc., a subsidiary of Boeing that develops customized unmanned hardware for commercial, government and defense customers.

"My time at Insitu was defined by talented people, meaningful challenges, and work that mattered. I'm grateful for the teams, partners, and leaders who made progress there possible. Stepping into Axiom, I'm energized by the mission, the momentum, and the opportunity to help shape what's next," Wegerer shared.

Photo via LinkedIn

The duo was celebrated on the floor of the New York Stock Exchange last week.

“We are pleased to welcome these exceptional leaders to the Axiom Space team," Axiom CEO Jonathan Cirtain added in the announcement. “Their strong record of helping complex organizations advance their strategic priorities will strengthen our executive team to further advance our core business objectives."

It's been a busy summer for Axiom. The company tacked on an additional $175 million to a previously announced capital raise, bringing the oversubscribed round to a total of more than $525 million, in June.

It also announced plans to open a Japanese subsidiary July 1. It tapped veteran Japanese astronaut Koichi Wakata to lead Axiom Space Japan as chief technology officer in the Asia-Pacific region. It also shared plans to establish Axiom Space Switzerland, a wholly owned subsidiary based in Lucerne that is also expected to begin operations this summer.

Axiom also officially redomiciled its legal headquarters from Delaware to Texas last month. Read more here.

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