Northern Virginia’s data centers — which handle over half of global internet traffic — illustrate the trade-offs of rapid AI infrastructure growth. They generate about 74,000 jobs and $9.1 billion annually for Virginia, but use massive amounts of water and electricity, contribute to higher local bills and create pollution risks. Lawmakers are trying to balance economic benefits with environmental and public-health protections, while community opposition is delaying some projects and shaping national policy debates.
What 'Data Center Alley' Reveals About America's AI-Powered Future
What ‘data center alley’ portends for America’s AI-powered future
Northern Virginia’s explosive growth of data centers — often called "Data Center Alley" — offers an early look at the trade-offs communities nationwide will face as artificial intelligence and demand for computing power accelerate. The region's hundreds of facilities have helped Virginia become a global hub for internet traffic, jobs and revenue, but they have also raised urgent questions about energy, water use, air quality and local quality of life.
Northern Virginia At The Center Of The Data Surge
Virginia is the de facto data center capital of the world: hundreds of facilities in Loudoun and Fairfax counties route more than half of global internet traffic, support roughly 74,000 jobs and contribute about $9.1 billion annually to the state economy. The region’s prominence dates back to the 1990s and is driven by proximity to Washington, D.C., relatively affordable land, tax incentives and permissive local zoning.
Local Costs And Community Concerns
Residents living near the facilities report higher utility bills, increased noise, and a changing landscape dotted with power lines and construction. Many homeowners’ associations have limited power to slow development, leaving neighbors to either adjust, relocate, or pursue political action.
“We’ve lived here since 2006, but this is not a comfortable place for me anymore,” Tracy Fowle, a lifelong Loudoun County resident, told reporters as she prepared to sell her home.
Energy, Water And Emissions
Data centers consume large amounts of electricity and water. In 2023, more than 300 data centers across northern Virginia used nearly 2 billion gallons of water, with Loudoun County alone consuming about 900 million gallons, according to the Environmental and Energy Study Institute. Some of the largest facilities can consume as much electricity as a city of more than 500,000 people.
Many centers rely on diesel backup generators that, according to a University of California, Riverside study, can emit pollutants at rates 200–600 times higher than natural gas-fired power plants. That study projects emissions-related public health costs could exceed $20 billion by 2028, disproportionately affecting disadvantaged communities.
Year-over-year utility price increases have been notable in states with heavy data-center concentrations: Illinois (+16%), Virginia (+13%) and Ohio (+12%), compared with a national electricity price increase of about 6% over the same period (CNBC).
Economic Benefits And Political Pushback
The fiscal benefits are substantial: data centers account for more than one-third of Loudoun County’s tax base, generating over $1 billion this year and reducing residential property taxes by about $0.48 per $100 of assessed value. Yet concerns over infrastructure and environmental impacts have prompted county officials to slow new applications amid power constraints.
State lawmakers have proposed measures ranging from buffer zones between data centers and neighborhoods to mandatory water-use tracking. Some bills stalled or were vetoed at the state level amid competing priorities and industry influence. Industry groups and trade associations have been politically active; donations and local support from both business and labor have complicated regulatory efforts.
Why This Matters Nationally
Policymakers around the country are watching Northern Virginia to learn how to balance economic opportunity with public-health, environmental and affordability concerns as the U.S. expands AI infrastructure. Local opposition has already delayed or blocked projects: at least 16 data center projects nationwide — including nine in Virginia — have been delayed or stopped due to community pushback.
Looking Ahead
The debate centers on whether regulators can craft targeted rules that protect communities and public resources without driving away investment. Advocates urge stricter oversight of water use, emissions and emergency generator pollution, while industry proponents stress jobs and tax revenue. The outcome in Virginia could shape policy choices elsewhere as the country scales AI infrastructure.
Sources cited in reporting include The Hill, the Environmental and Energy Study Institute, University of California research, CNBC, and public statements from local officials and industry representatives.
