Virginia’s Data Center Landscape Undergoes Dramatic Shift
Virginia’s dominance in the global data center market remains unchallenged, but the epicenter of this growth is rapidly shifting away from its traditional heartland. According to a comprehensive DCByte market analysis, Loudoun County’s market share has plummeted from 55% of Virginia’s data center capacity in 2019 to just 26% in 2024, signaling a fundamental restructuring of the state’s digital infrastructure landscape.
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Table of Contents
The Rise and Relative Decline of Data Center Alley
For years, Loudoun County, together with neighboring Fairfax County, formed the legendary “Data Center Alley” that reportedly handles approximately 70% of global internet traffic. In 2019, Loudoun alone accounted for 2.9GW of the state’s 5.2GW total data center capacity. However, the recent explosion in regional capacity to nearly 40GW has seen Loudoun’s share dramatically decrease despite its absolute capacity growing to 10GW.
The primary drivers behind this market redistribution include:
- Power capacity constraints limiting new development opportunities
- Stricter zoning regulations implemented in early 2025 that eliminated by-right development
- Significant community backlash against data center sprawl and environmental concerns
New Jurisdictions Emerge as Data Center Hotspots
As Loudoun County faces development challenges, other Virginia counties are strategically positioning themselves to capture the continuing data center expansion. Prince William County has established its “Data Center Opportunity Zone Overlay District” to concentrate development, though major projects like Devlin Technology Park and Prince William Digital Gateway currently face legal challenges that could reshape the county’s approach.
Meanwhile, Culpeper County has taken a more deliberate approach by creating the 690-acre Culpeper Technology Zone. This concentrated development strategy allows the county to leverage existing power infrastructure while minimizing community disruption and sprawl concerns.
Power Infrastructure Struggles to Keep Pace
The massive growth in Virginia’s data center market has created unprecedented demands on the state’s power grid. Dominion Energy, Virginia’s primary electrical utility, has seen its contracted data center power capacity nearly double in just six months. The company’s CEO, Robert Blue, has acknowledged that data centers are the primary driver of the state’s escalating power demands.
Dominion’s response includes:, according to technology trends
- Significant expansion of energy generation and transmission infrastructure
- Proposed new rate class for high-consumption data centers using over 25MW
- Commitment to building new power generation facilities specifically for data center demand
Balancing Growth with Community Concerns
The geographic redistribution of Virginia’s data center market reflects a broader industry trend toward more sustainable and community-conscious development. As Colby Cox, Managing Director for the Americas at DCByte, noted, as previously reported,: “This progress demonstrates that strategic planning and clear local frameworks can unlock long-term potential. It’s an encouraging sign that Virginia’s market can continue expanding while addressing community and power concerns.”
The evolution of Virginia’s data center market showcases how industry growth must increasingly navigate complex intersections of technological demand, infrastructure limitations, and community acceptance. While Virginia maintains its position as the world’s leading data center market, the rules of engagement are being rewritten across the Old Dominion.
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