Blackstone scraps plans for would-be 'world's largest' data center campus in Virginia

NIMBY battles usually involve housing or highways — but the hottest fight in Virginia right now is over data centers. And on Thursday, the data centers lost one.

Blackstone-owned QTS announced it is pulling the plug on the “Digital Gateway” project in Prince William County, Virginia — a massive 850-hectare campus that had been marketed as the world’s largest data center facility. The company said it has withdrawn all permit applications and will not move forward with construction.

The decision caps a months-long conflict that pitted QTS against local residents and environmental groups. The project had already secured approval from the county Board of Supervisors. But opponents kept fighting through the courts, filing a series of lawsuits that created legal uncertainty QTS was apparently unwilling to wait out.

Virginia holds a unique position in the data center world. The state hosts the highest concentration of data center capacity on the planet — much of it in the “Data Center Alley” corridor of Loudoun County, just east of Prince William. The AI boom has only accelerated demand: cloud providers need more compute, more storage, and more power, and Virginia has been their default destination.

That rapid expansion is running into a wall. Communities across Northern Virginia are pushing back against data center proposals, citing concerns over electricity consumption, land use, and water resources. The Digital Gateway project became a lightning rod for that frustration — a symbol of how the industry’s growth can collide with local interests.

QTS framed the decision as a strategic retreat rather than a full exit. The company said Virginia remains “an important part of its business” and plans to keep investing in Northern Virginia, Richmond, and Central Virginia. But the cancellation of a project this large sends a clear signal: data center developers can no longer assume they’ll get a smooth path to approval, even in the most tech-friendly markets.

For the broader industry, the Digital Gateway saga is a warning. As AI infrastructure spending hits record levels, the bottleneck may not be chips or capital — it may be local politics.