Amazon launches $35 billion data center expansion in Virginia

“AWS has a significant presence in Virginia, and we are excited that AWS has chosen to continue their growth and expand their footprint across the Commonwealth,”Gov. Glenn Youngkin (R) said in a statement. “Virginia will continue to encourage the development of this new generation of data center campuses across multiple regions of the Commonwealth.”

Youngkin’s statement said “numerous localities” are under consideration for the new data center campuses and will be chosen at a later date. Neither AWS nor the Virginia Economic Development Partnership (VEDP)said how many locations were being considered and how many would ultimately be selected.

Data centers, which act as a physical home for cloud computing and data storage, contain hundreds or thousands of computer servers in nondescript, highly secure buildings equipped with backup generators and elaborate cooling systems to reduce heat.

More than 275 such facilities are believed to be located in Northern Virginia — particularly in Ashburn, which is sometimes known as “Data Center Alley” — thanks to the region’s dense network connectivity, business-friendly policies and easy access to land and electricity.

Many local officials have touted the industry for increasing local tax revenue, but its growth in the regionhas not been without controversy. As companies like AWS have gobbled up land to meet increased demand, some residents in wealthy exurbshave complained about noise, impacts on water and property values, and the high-voltage transmission lines needed to power the data centers.

A fight over turning a ‘rural crescent’ in Northern Virginia into a hub for data centers

Del. Mark Sickles (D-Fairfax), who sits on the legislative commission that negotiated the economic incentives, said the expansion is meant to bring data center campuses to “small-town, rural Virginia,” where the industry has yet to take off in a similar fashion.

Amid heated battles over data centers in areas like Prince William County’s “rural crescent,” he noted that local lawmakers in each county or city being considered for a campus will likely be involved in determining where the facility will be located.

“Each one of them [data center campuses] will probably engender a debate locally,” he said, “but hopefully a debate about how to make it work for everybody.”

The smaller number of data centers being built in less prosperous parts of the state have seemingly faced little pushback from residents — with cheaper land values, too.

Microsoft has invested nearly $2 billion into a massive data center campus in Mecklenburg County and has planned to build more facilities in other parts of Southside Virginia. Henrico County, in the Richmond suburbs, has also seen a rush in data center development: Facebook’s parent company Meta set up a large facility there in 2020.

And officials in Virginia Beach, where new subsea cables to Europe and Africa provide unusually fast connections for data centers, recently slashed their taxes to try to attract more of these facilities.

Roger Wehner, AWS’s director of economic development, said the expansion will add to Virginia’s status as a leader in the cloud-computing industry and further cement the company’s presence in the state.

“Virginia is a world leader in innovation and cloud computing, thanks to its investment in a robust, highly-skilled workforce and emphasis on long-term public and private partnerships,” he said in a statement.

Wehner added that AWS has invested more than $35 billion in the state since establishing its first Virginia data centers in 2006. Now one of the largest private-sector employers in Virginia, Amazon is building its second headquarters in Arlington, with another $750 million in subsidies from the state potentially on the table.

Some economic-development watchdogs were critical of the deal, noting that each data center does not employ more than a handful of people when fully operational.

“The headline amount of money is really disassociated from the benefits that happen at the local level," said John C. Mozena of the Center for Economic Accountability in Michigan. "If all those billions of dollars are being spent somewhere else, that’s of no benefit to the state.”

The news comes as Youngkin said last week that he had rejected Ford Motor Co.'s efforts to consider locating an electric battery plant in Virginia, citing concerns about a potential security risk given the automaker’s partnership with China.

Antonio Olivo contributed to this report.