QTS, a company owned by Blackstone Group LP, has canceled a major data center project in Virginia, a decision driven by growing domestic opposition to such facilities.
The planned development, known as the Prince William Digital Gateway, was scrapped following protests and legal challenges from local activists concerned about its proximity to a Civil War battlefield site.
QTS stated the project had undergone a "rigorous process of planning, analysis, and public review" and "would have brought significant infrastructure investment to Prince William County."
Activists in Prince William County celebrated the news of the project's termination.
Elena Schlossberg of the Coalition to Protect Prince William County remarked, "What an amazing feat. This community is extraordinary."
Key Drivers of the Data Center Boom and Backlash
Data center developers are capitalizing on the artificial intelligence boom, constructing facilities across rural America. Companies like Google, Amazon, Microsoft, and Meta are projected to spend a combined total exceeding $400 billion on these facilities this year.
However, local resistance to these projects is spreading. Leading progressive political figures, including Senator Bernie Sanders, have called for a pause on data center development, while local groups such as Atlanta's "Stop Project Sail" are protesting projects in their own regions.
Regulatory and Public Sentiment Shifts
Virginia recently enacted a pioneering tax policy, levying a charge of $0.011 per kilowatt-hour on electricity used by data centers, regardless of whether it comes from the grid or on-site generation. Amounts collected by the state exceeding $600 million will be refunded. This move comes amid rising opposition within the state's "data center alley," even as sales tax exemptions for the industry remain in place.
Recent polls indicate strong public opposition to data center construction in the United States. A Gallup poll in May showed that 71% of Americans oppose having a data center built in their community.
Industry and Political Acknowledgment of the Challenge
Corporate executives and politicians have acknowledged that the data center construction surge has outpaced public acceptance. Calvin Butler, CEO of Exelon, the largest utility in the U.S. by customer count, stated that hyperscale data center operators were "caught flat-footed" by this wave of opposition.
He added, "They are not doing this with the local community; they are doing this to the local community."
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