Microsoft is set to invest almost $700m (£455m) in a new data centre to support cloud-based services offered by its upcoming Xbox One games console and Office 365.
Known as ‘Project Mountain', the data centre will be based in the American Midwest at West Des Moines, Iowa and will benefit from $20m in tax credits from the state thanks to a deal with Iowa Economic Development Authority Board.
Microsoft's investment makes it the third big technology and web firm to invest over $1bn into Iowa based data centres, with Facebook announcing plans to build one in Altoona by 2014 in April this year. Meanwhile, Google opened a data centre at Council Bluffs in the west of the state during 2009.
"We're seeing a lot of interest in this space. There may be more projects to come," said Debi Durham, state economic development director for Iowa, adding, "We've created a business culture that fosters this."
In addition to providing government incentives for organisations to build data centres in the state, Iowa also offers stable sources of energy at low cost.
The new data centre will be used to help power Microsoft's Xbox Live services for the upcoming Xbox One, in addition to providing cloud services for the console.
At the launch of the console last month, Microsoft claimed the new Xbox Live will be powered by over 300,000 servers, reportedly more than the world's entire computing power in 1999. Xbox Live was launched with 500 servers, a figure which has now grown to over 15,000.
