This article has been edited since it first appeared in print.
A modern-day gold rush is here in Richmond, says John W. Martin, as the nascent data center industry rises to meet the information needs of the future.
As the president and CEO of RVA757 Connects, however, Martin’s vision goes beyond the capital. He and his nonprofit coalition of business, higher education and community leaders see a global internet hub that stretches across the commonwealth, connecting the “megaregion” of Hampton Roads and Richmond to Northern Virginia.
It begins in the Virginia Beach area, where three subsea internet cables make landfall, physically connecting sites across America and in Brazil, France and Spain. The data then snakes across Interstate 64 before it reaches the greater Richmond region’s rapidly expanding data center portfolio, which directs most of the information northward to Washington, D.C.
“When you add all these things up,” Martin says about what he calls the I-64 Innovation Corridor, “it really frames this idea of digital infrastructure, and our belief, now more than ever, that those communities that have invested in and created policies supporting development from these big and small companies are going to be the winning cities of tomorrow.”
A Meta employee pulls out a server module within a rack at the Meta data center at White Oak Technology Park in eastern Henrico County. This digital infrastructure exclusively supports Facebook, Instagram, WhatsApp and other Meta services. (Photo courtesy Meta)
Massive Growth
To understand the recent explosion of data centers in Virginia first requires some explanation of how data travels across the internet to your phone or other devices. The fastest path between two computers is a physically close connection, as opposed to a wireless signal. To make Facebook and Instagram fast and functional, for example, parent company Meta has built more than 20 data centers across the country to organize and process the huge amount of information traveling between your phone, the physical digital infrastructure and Meta itself, all of which is happening simultaneously around the world. Remote work and video calls during the pandemic only exacerbated the role that data plays in our modern lives, and increasingly data centers handle demand for video streaming, smartphone functions, data digitization and artificial intelligence.
This massive information need has caused Northern Virginia — home to the federal government and the thousands of people who serve or assist it — to become the largest data center market in the world, Dominion Energy says in its 2024 energy demand forecast. The region is also larger than the next five biggest U.S. data center markets combined. A report by the state’s Joint Legislative Audit and Review Commission adds that “Data Center Alley,” centered around Ashburn, is responsible for 13% of all reported data center operational capacity globally and 25% of capacity in the Americas. As of 2025, JLARC counted roughly 150 data center sites in Virginia that collectively house 340 data center buildings.
There’s never been in the history of Richmond any type of expansion that would even come close to this.
—Scott Brown, president, Pixel Factory Data Center
Most of the nine active data centers located around Richmond were built over the past decade. QTS has been so successful at White Oak Technology Park in Sandston — where Meta is also located — that it is developing another 622 acres nearby to build what has been dubbed “White Oak Technology Park 2” and could host 13 more data centers. Chesterfield County has also become a hotbed of activity, including plans by Chirisa Technology Parks to build two centers in Meadowville Technology Park. And even rural localities such as neighboring Powhatan County are getting in on the action, with supervisors there approving an estimated $2.7 billion data center campus in late 2024.
JLARC finds that Northern Virginia’s success has come because of “a strong fiber network, supply of reliable cheap energy, available land, proximity to major national customers and the creation of a state data center tax incentive.” As real estate is snapped up, however, companies have looked to other counties, which are happy to provide incentives to attract an industry estimated to annually contribute 74,000 jobs (mostly construction-related), $5.5 billion in labor income and $9.1 billion in gross domestic product to Virginia’s economy. Chesterfield County, for example, slashed its property tax rate for data center equipment to $0.24 per $100 of assessed value in 2019. The 86% reduction, still current as of 2025, created what the county called the lowest data center tax rate in Virginia.
“There’s never been in the history of Richmond any type of expansion that would even come close to this,” says Scott Brown, owner of the Pixel Factory Data Center in Hanover County. “The Philip Morris expansion, industrial, electrical, any industry that has come to Richmond, there has never been anything on the scale whatsoever.”
Scott Brown is president of Pixel Factory Data Center in Hanover County. (Photo by Jay Paul)
Meeting Power Demand
Why here? In selecting a site in eastern Henrico County, a Meta spokesperson says there was “good access to infrastructure and renewable energy, a strong pool of talent, and a great set of community partners that helped us move our project forward.” Meta and others are also able to take advantage of three DE-CIX internet exchange points in the area to help direct their data.
However, there are other, bigger factors favoring Virginia in data center site selection. The damage caused by 2012’s Hurricane Sandy in New York and New Jersey was an “industry awakening,” Martin says. Companies began searching for lower-risk landing sites for new subsea cables and the buildings connected to them. Many chose Camp Pendleton, where three subsea cables come ashore near Virginia Beach, because the threat of hurricanes and coastal flooding is “relatively moderate,” according to the Federal Emergency Management Agency’s National Risk Index. Both ratings are comparable on a census-tract level to Richmond’s Capitol Square. Four additional cable conduits are being built in nearby Sandbridge.
The state’s relative safety from severe weather, earthquakes and other natural disasters also helps Dominion Energy reliably meet growing power needs driven by data centers. As of 2025, the utility provided about 3,500 megawatts of power for 450 data centers across Virginia, an amount of electricity that would power about 875,000 homes. In its 2024 Integrated Resource Plan, a forecast for energy demand, Dominion notes that it has averaged about 15 data center connections per year since 2013. In 2024 alone, it connected 16 new data center campuses that together have an ultimate capacity of almost 1 gigawatt.
“Power demand from data centers has about doubled over the last five years, and we expect it will quadruple over the next 15 years,” Dominion spokesperson Tim Eberly says. He adds that it’s “the highest levels of power demand growth that we’ve seen in Virginia since the years following World War II.”
In its plan, Dominion outlined what Eberly calls “an all-of-the-above approach to not only reliably serving all of this growing demand but also doing so affordably and with increasingly clean energy.” Over the next 15 years, 80% of its new power generation will be carbon free, and nearly half will come from solar power. Dominion is also looking to build more small modular nuclear reactors, including one at its North Anna Power Station in Louisa County that would service Amazon, which is building two campuses in Louisa’s Technology Overlay District. And in December 2024, Commonwealth Fusion Systems announced it’s building “the world’s first grid-scale commercial fusion power plant” at the James River Industrial Center in Chesterfield to try to make nuclear fusion more than a scientific dream.
Dominion’s energy plan also includes new natural gas lines, which Eberly says is about increasing resilience. “We’re all in on renewables and carbon-free energy,” he says, “but renewables alone are not going to reliably serve all of this growth, and so we need to have reliable backup power for natural gas so that we’re able to reliably serve our customers all day long, year-round, rain or shine, not just when renewables are producing electricity.” The utility says its energy strategy and infrastructure investments allowed customers in three states to have power 99.98% of the time in 2023, except during major storms.
“Dominion [has] been great to work with,” says Pixel Factory’s Brown. “We’re a small facility; we’re under a megawatt. Dominion treats us identically to the big players, maybe not as much in price negotiation, but the price that we get is actually very good compared to all the other states. [He adds in a separate email that, because of Pixel Factory’s size, it can’t negotiate the price set by the State Corporation Commission.] They treat us incredibly well. Dominion is moving as fast and as furious as they can to get greater power.”
Pixel Factory, among other things, provides a private internet network for smart devices and services to apartment complexes in Scott’s Addition and outside the state. (Photo courtesy Pixel Factory Data Center)
Cause for Concern
Not everyone is happy about the explosion of data centers.
Opponents say their massive energy consumption isn’t worth the tax revenue and that, once construction is completed, data centers employ relatively few people. There are also concerns about impacts to the environment and residential and historic properties.
The General Assembly directed JLARC to study data centers following the introduction of numerous bills opposed to their proliferation, many of which were filed by state Sen. Danica Roem, D-Prince William, who compares the data center boom to a sugar high for tax revenue that destroys forests, creates noise pollution (estimated by JLARC to be 40 to 59 decibels, quieter than a typical conversation) and threatens historic sites. Roem says her 2024 bills were about stopping the state from digging itself into a hole, adding, “I’m trying to break people’s shovels in Northern Virginia.”
Roem points to Project Oasis, an effort to utilize abandoned coalfields in Southwest Virginia, as an alternative to continued construction in Prince William County. The project’s main idea takes advantage of the fact that many of the mines are flooded, says Will Payne, whose Coalfield Strategies is spearheading the effort. The water is circulated through a data center to cool it off, and the now-hot water is returned underground to cool down. The energy savings from using the $7 million system, he says, could be $1 million each year for a 40-megawatt data center.
That geothermal cooling system is similar in concept to what is used at most other data centers, which largely tap into local utilities. JLARC found that most data centers use about 6.7 million gallons of water per year, roughly the same as a large office building. However, the report notes that 11 data centers each used over 50 million gallons in 2023, including one building that used 243 million gallons, roughly 10% of the industry’s total use.
“The reality,” Roem says, “is we cannot be destroying our environment, killing off our wildlife and harming the quality of life of the people I serve because someone needs [to save] nanoseconds for crypto[currency] mining or some garbage like that.”
As far as power generation goes, Dominion maintains that its “role in data center development is simply providing power,” says utility spokesman Eberly. “We have an obligation to serve every customer, large or small, in our service area who requests electric service — that’s a legal obligation we have. ... Dominion Energy is not involved in deciding land use questions, where data centers get developed or whether they get developed. That’s the responsibility of the local governing body.”
JLARC notes that, should energy demand fall short of forecasts or data centers close, Dominion’s work to meet data power demand would leave it “with infrastructure costs that would have to be recouped from their broader customer base,” driving up costs for all customers. The report recommends that legislators direct Dominion to plan for that scenario. One idea, similar to a proposal in Ohio, is to bill data centers based on their energy forecast, even if they use less. Another would require data centers to pay for smaller projects related to their energy needs, such as transmission line extensions.
Concerns over community impact have resonated with local officials in some cases. In Henrico County, a proposal for a data center near Azalea Avenue was withdrawn in November 2024 after the Planning Commission sided with residents who feared the project would increase noise and air pollution, traffic and industrialization of their neighborhood.
Unlocking Potential
Should the promise of a data-driven economy become reality, Richmond and Hampton Roads are poised to become major players.
“We have a running start over other regions where their leaders just weren’t as smart as we were and investing in this early on,” RVA757’s Martin says. Following a digital infrastructure conference in Lisbon, Portugal, both Martin and Pixel Factory’s Brown concluded that “we are the digital infrastructure industry’s best-kept secret.”
The word is getting out, though. RVA757’s plans to advertise Richmond and Hampton Roads as a megaregion of 3 million residents convinced PCs for People, a nonprofit computer refurbisher, to expand here. Meta has given over $4 million to local schools and nonprofits, helped launch the Center for Environmental Studies and Sustainability at Varina High School, and donated to the VCU Health Children’s Tower. Henrico is also taking advantage of the flood of tax revenue, directing some toward an affordable housing trust.
“If you can improve the productivity per worker and improve your GDP,” Martin says, “you can increase wages, and you can lift up even more people. ... The difference [for the megaregion] is going to be this digital infrastructure. If we can really harness this, it’ll enable us to catch up to these cities and regions we compete against, but not necessarily by just bringing in more people. It’s about making us more productive, and that’s what digital technology will do.
“When I look out into the future, he adds, “I see what has happened to us with digital infrastructure as the biggest advantage to not only catching up with the other regions we compete against but surpassing them, and that’s profound.”
Power Up
Eighty percent of the new power generation that Dominion Energy is building over the next 15 years will be carbon free. The remainder, consisting of natural gas, provides reliable backup power.
- Solar (45%): 12,210 megawatts 150% increase over Dominion’s current fleet, the second-largest in the U.S.
- Battery Storage (15%): 4,100 MW
- Offshore Wind (15%) : 3,460 MW 130% increase beyond the Coastal Virginia Offshore Wind project that is already under construction near Virginia Beach
- Small Modular Nuclear Reactors (SMRs) (5%): 1,340 MW
- Natural Gas (20%): 5,934 MW
