Inside the data center capital of the world
Just about 30 miles outside Washington, D.C., where farmland, Civil War markers and bedroom communities converge, is another kind of capital.
This part of northern Virginia is home to hundreds of mostly windowless, humming buildings, some the size of shopping malls. Together, they make up the data center capital of the world.
“They’re so huge and imposing on a human scale,” said Julie Bolthouse, director of land use at the Piedmont Environmental Council, referring to the facilities in an area known as Data Center Alley. “It’s basically a giant, concrete computer. And there’s the wires you can see over your head, and all throughout Data Center Alley now is substations and transmission lines and giant concrete boxes.”
Each data center can hold hundreds of thousands of computer servers. They’re the backbone of the burgeoning AI industry, required to train and deploy large language models and image generators. But as data center researcher Jonathan Koomey pointed out, they’re also integral to more basic online functions like search.
“Every time you send a request to Google to do a search, that request goes to a data center and the data center does computations and then comes back with a result,” Koomey said.
So how did this part of Virginia become host to the largest concentration of data centers in the world?
Fletcher Mangum, the founder and CEO of Mangum Economics, suggested several key reasons.
“The first is, northern Virginia had the first-mover advantage. The internet was actually born there, so as a result there was a high concentration of high-speed [fiber-optic infrastructure], and that was really attractive to the industry.”
Mangum said it was that fiber network that brought dot-com giants like AOL and Yahoo to the area in the 1990s. Now, it’s luring more modern tech businesses dealing in cloud data storage and artificial intelligence.
Another boost for the industry: state tax exemptions. “Data centers typically get one tax exemption, and that’s a sales tax exemption on their capital equipment purchases,” Mangum said.
Most data centers don’t pay state sales tax on computer equipment, but Mangum pointed out they do pay all other taxes.
According to a study by Mangum Economics for the Northern Virginia Technology Council, in 2022 the data center industry received a $33 million tax exemption, while paying about $640 million in state taxes.
That’s just at the state level. For the counties that collect property taxes from data centers, Mangum said, “data centers are a gold mine to localities.”
While all that might be good news for local governments and tech companies, some residents call the industry a threat to their community.
Prince William County currently hosts more than 40 data centers and is set to welcome at least 30 more facilities in the coming years. Elena Schlossberg, executive director of the Coalition to Protect Prince William County, said she worries about competing with the industry for natural resources.
“It is the water consumption, it’s the impact on groundwater, it’s the impact on our grid,” Schlossberg said. “There is no other industry in the history of mankind that has consumed this many resources, including power.”
By some estimates, the average data center consumes about 100 megawatts of power, which is the same amount used by approximately 25,000 U.S. homes.
All that energy is spent keeping the servers online 24/7 while cooling them down using fans and water-based systems.
The data center industry has seen explosive growth in this region. Some worry about the strain on Virginia’s power grid if the trend continues.
But researcher Jonathan Koomey said it’s not that simple to predict. “Things change so rapidly that there’s no way to know beyond a few years,” Koomey said. “Many things can change.”
Still, environmental advocates like Schlossberg worry about what an industry set to almost double in size means for her rural community.
“Is this the lesson we teach our children? That as long as you consume resources at the cost to the community, then it’s OK?” she asked. “This is not a sustainable model.”
For now, Schlossberg’s coalition is joining with other groups to oppose the development of more data centers, including a new campus being built on the border of the historic Manassas battlefield. The land where the first battle of the Civil War was fought over 160 years ago is now home to the fight over northern Virginia’s data center industry.
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