How Northern Virginia Became ‘Data Center Alley’

“Faithful Servant, now at Peace,” reads one heart-shaped headstone in Tippets Hill Cemetery. But in the background of this final resting place, there is an incessant whirring sound and a shrill beep that blares again and again.

That’s because the small, historically Black burial ground in Loudoun County, Virginia, is surrounded on all sides by data centers. The cemetery’s few parking spaces had construction vehicles parked in them when NOTUS visited in early June.

The cemetery — and Northern Virginia at large — didn’t always look like this. At the turn of the century, there were a handful of data center campuses in Loudoun, Prince William and Fairfax counties — a region now known as data center alley.

Today, those counties are home to more than 300 data centers. Almost 200 more are expected to go up in the coming years. Loudoun specifically has the highest concentration of data centers in the world.

But that title may be in jeopardy. Public sentiment towards data centers has soured, with opponents pointing to rising household utility bills and environmental concerns. Politicians are weighing how to balance constituent demands with a behemoth industry those same constituents rely on for cloud computing and county revenue.

“Virginia has our biggest concentration, but as the old saying says, ‘Don’t put all your eggs in one basket,’” a senior executive at a data center company told NOTUS. “Based on what happened this year, it’s further emphasis that we clearly have to spread our business around. Our customers are going to be looking for the lowest cost of occupancy — that’s just math.”

In the last two decades, Sterling, Virginia, has added dozens of data centers. Photo illustration by Lillian Bautista/NOTUS from data courtesy of the Piedmont Environmental Council; Maps Data: Google/USDA/FPAC/GEO/Commonwealth of Virginia; Google/Airbus

Ramping Up

A big part of Northern Virginia’s appeal is its geography.

Loudoun County’s proximity to D.C., CIA headquarters and the Pentagon made it an early hot spot for the technology contractors that intelligence agencies and the military have increasingly depended on since World War II, said Ali Fard, an assistant architecture professor at the University of Virginia who wrote a book about “grounding” cloud computing.

The county became ground zero for the internet in the late-1990s, when telecommunications companies UUNET and AOL both moved their headquarters to Ashburn. AOL, the once ubiquitous dial-up internet giant, installed a massive network of fiber to create an “information superhighway” around its campus, laying the foundation for Northern Virginia’s data center industry with cheap and plentiful power, Fard said.

Things accelerated in 2008, when the nation was reeling from the financial crisis and housing market crash. Northern Virginia was hit hard. Loudoun’s regional economy was 81% dependent on residential real estate at the time, Buddy Rizer, the county’s economic development director, said in a statement shared with NOTUS.

“We lost a third of our tax base almost overnight. I came in with one clear goal: build a stronger, more diverse commercial tax base to stabilize our future,” wrote Rizer, who assumed his role in 2007. “That’s when I saw an opportunity in data centers.”

“The data centers kind of bailed them out,” said Sarah Parmelee, a land use representative with the Piedmont Environmental Council. “There was a bunch of built-out infrastructure that Loudoun needed to figure out how to pay for, and data centers took up the slack.”

Loudoun also had the Potomac River, which up until a major sewage spill this year was a “really unflappable and incredible water source,” Parmelee said. It also has one of the largest reclaimed water systems in Virginia, a major attraction for the data centers that rely on those systems to cool tenants’ servers.

To seal the deal, Virginia lawmakers approved a tax break for data center operators in 2008 that invested at least $75 million and created 100 new jobs. (The criteria are currently $150 million in investment and 50 new jobs.) The sales and use tax exemption applies to equipment including generators, HVAC systems, water pumps and storage tanks, cabinets, battery racks, and software.

At the time, policymakers estimated the exemption would cost the state $1.5 million in lost revenue. In 2025, it saved data centers $1.9 billion, making it Virginia’s largest tax break.

The data center company executive, granted anonymity to discuss the sensitive dynamics of an industry under intense scrutiny, said the exemption gave Virginia a “leading edge” when they were considering where to build.

The stage was set, and the need emerged with the advent of cloud computing. Data that had long been stored on consumers’ personal devices had to be stored in centralized data centers, which began as smaller, fairly innocuous buildings, Fard told NOTUS. The COVID-19 pandemic kick-started the “work from home” era, intensifying demand.

The release of OpenAI’s ChatGPT in late 2022 marked a new era of computer processing power needs. Companies like Google, Amazon and Microsoft — often referred to as “hyperscalers” — began spending hundreds of billions of dollars a year to build new data centers to meet the enormous demand. Some projections expect the industry to spend roughly $7 trillion in data center construction by the end of the decade.

Loudoun rolled out the red carpet for data center developers, slashing its approvals process to just six months.

“I was literally flying around the country meeting with major players like Amazon, Microsoft, Equinix, and Digital Realty, pitching Loudoun as the best place in the world to build digital infrastructure,” Rizer wrote. “We had empty buildings from the dot-com bust, tons of unused fiber in the ground thanks to AOL, available land, and power.”

By 2016, Loudoun County officially became home to the world’s largest concentration of data centers. Today, data centers generate almost half of its property tax revenue.

The Bull Run region of Prince William County has also seen major growth. Photo illustration by Lillian Bautista/NOTUS from data courtesy of the Piedmont Environmental Council; Maps Data: Google; Google/Airbus

A Changing Landscape

Data centers first came onto Elena Schlossberg’s radar in 2014. She discovered, she said, that the construction of a transmission line set to cut through her property was triggered by a single customer: Amazon. The company was building a data center campus in Haymarket as part of a $600 million cloud computing contract with the CIA.

“There was really not much we could do,” said Schlossberg, a rural Prince William County resident who leads an anti-data center coalition. “We would be not only sacrificing our property through eminent domain, we would be paying for that abuse.”

Today, her county — located just south of Loudoun — is home to 55 data centers, with 75 more planned or under construction, according to a county database. Between 1986 and 2016, only 10 were constructed county-wide. That number surged in 2017, when six were built — four of them by Amazon. Another wave of construction came around the AI boom, with 20 centers built in 2024 and 2025.

But developers looking to build in Prince William County are increasingly running into backlash.

The county almost became home to the world’s largest data center campus, known as the “Digital Gateway.” Pitched in 2021 and approved in 2023, the project — a sprawling 2,100 acre data center campus on the edge of the historic Manassas National Battlefield Park — was halted by resident lawsuits.

Prince William County and one of the two data center operators, Compass, abandoned the project this spring after an appeals court upheld a decision to block the necessary zoning.

The second data center operator, Quality Technology Services (or QTS), appealed to the Virginia Supreme Court but fully abandoned the project last week. The news was first reported by Bloomberg, which cited anonymous sources saying company executives didn’t think it was worth it to continue the legal fight.

In a statement to NOTUS, a spokesperson for QTS confirmed that although the company remains tied to Virginia, it “will proceed with a responsible and orderly termination of project activities, consistent with our commitments and values as a company and community partner.”

Activists see the withdrawal as a victory.

“They messed with the wrong people,” Schlossberg told NOTUS.

In Sterling, one data centers sits right across the street from a residential area. Zara Norman/NOTUS

Tradeoffs

In 2025, John McAuliff was running for the Virginia House of Delegates as a Democrat. His district, which includes western Loudoun, is split almost down the middle politically.

But McAuliff found something everyone wanted to talk about: data centers. He said he had to “convince” his team that this was an issue worth investing time and resources in. It was “a bit of a risk,” he told NOTUS, but it ultimately paid off.

McAuliff won the delegate seat in fall 2025. In his first term, lawmakers passed his bill barring the Department of Environmental Quality from issuing air permits for data center applications unless their generator emissions fall below a certain threshold.

The Virginia legislature as a whole seemed to wake up this spring to the negative public sentiment surrounding data centers. While a push to sunset the data center sales and use tax exemption early ultimately failed, Virginia did pass a first-of-its-kind tax on data center energy consumption.

The speed with which that political calculus shifted shocked even advocates and lawmakers who had been working for years to rein in the rampant growth of data centers in the state. Industry executives were surprised, too, and have started to discuss focusing on some of the 37 states with the sales and tax use exemption that are more interested in their business.

The data center industry contributes roughly $9 billion of yearly economic growth to Virginia’s state economy, according to a 2024 economic audit commissioned by the Virginia General Assembly in 2023. Most of those benefits derive from constructing, rather than operating, data centers, that report noted.

But as construction accelerates, elected officials and voters are seeing skyrocketing utility bills they blame on data centers. A recent E3 analysis paid for by the Data Center Coalition, which reviewed the analysis prior to its release, pointed to inflation, grid resilience, market structure and other factors in rising rates.

Ultimately, fast-changing communities are questioning if the trade-offs are worth it.

“We can’t just pretend that it’s just revenue,” McAuliff said. “We need to look at the other side, too.”