Part 5
By Peter Cary, Contributing Writer
Anyone wondering why data centers are so hard to stop can find the answer in history.
In his farewell address on Jan. 17, 1961, President Dwight D. Eisenhower warned the nation about the growing “military-industrial complex, ” a powerful alliance of defense contractors, the Pentagon and politicians who he feared would dominate the weapons industry to benefit their own mutual interests.
His prediction proved true.
Now Northern Virginia has its own “complex,” a coalition of data centers, politicians, utilities and developers whose interests are heavily intertwined. As a result, data centers are proliferating – and the money generated by all players is mind-boggling.
Utilities are guaranteed a return from every data center they hook up. Developers build the buildings and pocket the profits. Labor unions, whose members have earned $5.5 million from data center work, lend their support. And data center companies make hundreds of billions of dollars.
All four donate heavily to lawmakers and lobby for helpful legislation, and to local officials, whose counties reap hundreds of millions of dollars in tax revenue.
Everyday Virginians have little power to leverage against them.
“They pay very high-dollar people a lot of money to influence legislators,” said Danica Roem, a state senator from Prince William County who saw all three of her data center reform bills defeated by fellow lawmakers.
The money in play is “pretty staggering,” said Michael Turner, a Loudoun County supervisor who has written a paper about the data center explosion.
Chris Colvin, who led a coalition of Catlett residents to stop a data center in Fauquier County, said it was easy to see how those forces wield power.
“I am not a brainiac, but even I figured it out pretty darn quick – it’s all for the sake of money, money, money, money,” she said. “It’s all about the money.”
The idea generates some pushback. “That fundamentally misunderstands what our role is as a public service,” said Aaron Ruby, a spokesman for Dominion Energy. “When data centers are recruited by economic developers to come to Virginia … we come to the table with solutions, and we come to the table with an obligation to serve.”
“We come to the table with solutions,” says Dominion spokesperson Aaron Ruby. Submitted Photo.
The Data Center Coalition did not respond to questions about profits. But at a presentation in April, spokesperson Kate Smiley pointed out that data centers feed the huge public hunger for data and businesses’ need to store and move data efficiently and safely.
Recent announcements from Google, Microsoft, Amazon Web Systems and Meta indicate they plan to spend up to $400 billion on artificial intelligence buildings and equipment just this year, and $2 trillion by 2030.
“In the next five years, consumers and businesses will generate twice as much data as all of the data created over the past 10 years,” Smiley said, “and approximately 5.4 billion people, or about two-thirds of the global population, is online.”
“It’s just simple law of supply and demand,” said John Dinsdale, chief analyst for Synergy Research Group, which tracks the data center industry. “And of course there is a profit motive. If the hyperscale companies did not or could not make good returns on their huge investments, they wouldn't be spending that money. Amazon, Microsoft, Google, Meta, et al, are not public service companies.”
'Golden Age' of Data Centers
Green Street, an online real estate analysis firm, calls this “the Golden Age of Data Centers,” an era when their profits can approach 50%.
Public records back that up.
Amazon Web Services, which operates 112 data centers in Northern Virginia and has more pending, made $40 billion last year, according to a federal filing. Its cluster is described as the largest single concentration of corporate data centers in the world.
Even though it is only part of the Amazon mothership, web services accounted for 40% of Amazon earnings last year. In fact, in 2022, when Amazon’s retail divisions lost $10.7 billion, its web services division propped up the whole company with its $22.8 billion in profits.
Microsoft’s Intelligent Cloud makes even more. In 2024 its margin was nearly 48% as it earned $49.6 billion – that’s more than the entire economies of Bolivia, Latvia or 94 other countries. Microsoft has 12 data centers in Virginia and is looking to build at least two more.
Google makes most of its money from its ads and search engine, which could top $130 billion this year. Its data storage and retrieval division, Google Cloud, is on track to make $11 billion.
Companies that build and lease data centers are seeing a boom, too. Digital Realty, with 34 data centers in Loudoun and Prince William counties and 300 worldwide, predicts earnings this year before taxes and interest of more than $3.2 billion.
"Record bookings…underscore the strength of our full-spectrum strategy and the breadth of the growing demand for digital infrastructure," said company CEO Andy Power in an earnings call.
According to the financial services company Motley Fool, chip maker Nvidia’s data center revenue skyrocketed to $30.8 billion from $2.4 billion in the past three years. Its profits in fiscal year 2025 were $72.8 billion.
The expansion shows no signs of slowing. Between 2020 and 2024, Microsoft tripled its investment in data centers to $55.6 billion in 2024 from $17.6 billion in 2020. Spending on data centers by Microsoft, Alphabet (Google), Amazon and Meta (Facebook) jumped 55% from 2023 to 2024, according to a Motley Fool analysis.
In late August, Google announced it would spend $9 billion more in Virginia on data center infrastructure – on top of the $4.2 billion it has spent so far on three Northern Virginia campuses. Two more are in the pipeline.
Worldwide, cloud services are “on the verge of becoming a hundred-billion-dollar-per-quarter market” growing at 25% a year, reports Synergy Research.
Northern Virginia has about 200 data center complexes with more than 400 buildings. Yet Loudoun County, the epicenter, is still expanding. According to Ashburn Supervisor Turner, the county, with 181 buildings, has 117 more in the works.
The cloud has spread to Prince William County – which has 44 data centers built and 15 under construction – and it reaches into Fairfax, Fauquier, Culpeper and Stafford counties and to Richmond and beyond.
Data centers have been known to pay $3 million an acre or more for land. But the industry needs electric power, local lawmakers who will approve locations, state legislators who will ward off reforms and slowdowns, and developers to make projects happen. It has them all.
Boon for Power Companies
Data centers are among a utility’s best customers.
Dominion Energy, a $46 billion monopoly that supplies energy and maintains transmission lines in Northern Virginia, says it is required by law to sign contracts to power data centers. Still, it stunned observers when, in the last six months of 2024, while it could not produce enough energy itself to serve all its customers and had to buy some from other producers, it announced that it had signed contracts that would double the future data center power demand – to 40.2 gigawatts from 21.4 gigawatts. (By this September, the number had risen to 47 gigawatts.)
The looming power deficit has forced Dominion to sketch out roughly $100 billion in generation projects – solar, wind, gas turbines and small nuclear reactors. More immediately, Dominion is building up to $18 billion in transmission lines and substations for data centers, more than half of which will be subsidized by ratepayers under current rules.
Experts say such projects are actually good for Dominion, growing its investment base, which had been flat for years. The State Corporation Commission, Dominion’s rate regulator, allows the utility up to 9.7% return on its generation and transmission investments, and Dominion is now requesting approval for a 10.4% return. Dominion says its capital investment needs are “unprecedented” and it must attract more investors.
Gregory Abbott, a former commission deputy director, testifying in a Dominion rate-setting case in July, said the arrangement was an incentive to overbuild. “The higher the value of the infrastructure, the more profit Dominion realizes,” he said.
The arrangement is standard for investor-owned utilities: In exchange for promising power to all who ask, the company operates as a monopoly and is allowed a set return on its investments.
Dominion spokesman Ruby said in an email that the current 9.7% is set by the SCC and reflects the rising cost of capital, and that in 2023 and 2024 the company’s return on equity was 7.7%, less than what regulators allowed.
But Mark Ellis, a former California utility company executive turned consumer advocate, says equity returns of 9.7% are way too high. The net result, says Ellis, is a huge transfer of wealth – the public is paying to bump up returns for power company shareholders.
He and other analysts argue that utilities’ return on equity ought to be similar to the return on other investments like corporate bonds, which run about 6%. And that utilities have pressured regulators into letting them make more.
Counties Reap a Tax Windfall
Of course, no data centers get built without local – in most cases county – approval. And data centers have been hard to resist. They are huge concrete warehouses packed with racks and racks of data-processing and storage units. All of which is taxable.
Loudoun County showed the way. When an industrial zone near Ashburn and Dulles International Airport began to attract data centers because of a fiber-optic cable node there, Loudoun saw opportunity. In 2008 the county launched an aggressive campaign to attract data centers and tax them, and its tax revenue ballooned.
This year, the county is expecting about $895 million in data center real estate and equipment tax revenue, which will nearly fund its entire operating budget.
“Data centers have allowed us to pay for schools, roads, Metro, mental health counseling, family services, affordable housing, parks – the whole plethora of county services,” said Supervisor Kristen Umstattd (D-Leesburg) at an April meeting.
With data center operators and developers willing to pay top dollar, land prices in Loudoun have rocketed to $3 million an acre. That has driven up real estate values overall, and real estate tax revenue even more.
Prince William County is chasing this dream – or, at least, the previous board of supervisors was. Prince William has about one-fourth the number of data centers as Loudoun, but the county has another 70 million square feet planned.
In 2024, new county tax rates cranked tax revenue from data center computer equipment and real estate up to $293.7 million. The latest rate is the same as Loudoun’s, and is expected to generate more income in 2025, said Dave Sinclair, director of the county’s budget and management office.
Other jurisdictions are not immune to the temptation. In Warrenton, a 4-3 majority of the town council voted on Feb. 14, 2023, to approve a 220,000-square-foot Amazon data center at the northeastern entrance to town.
Perhaps its biggest attraction was that it could generate up to $2 million in tax revenue for the town, whose annual budget is about $53 million. But worry about data center noise, power lines and the secrecy of the project process got an anti-data center council elected, so the revenue may never materialize.
Still, other data centers are waiting in the wings in Fauquier County, in Vint Hill and Remington, which one group has estimated could bring in upwards of $200 million for the county if all were built.
Developers Turn Farmland into Cash
Just how big is the opportunity for developers to cash in on data centers?
“Current expectations are that there will be approximately $1 trillion of capital expenditures in the United States over the next five years to build and facilitate new data centers,” said Stephen Schwarzman, chairman of asset manager Blackstone, in a recent earnings call.
The pressure is felt especially in Loudoun, where scores of data centers await approval, in Prince William County, where developers are scrambling to assemble data center lots, and in Fauquier County, where two projects are under development and three more are proposed.
Data center investment funds have sprung up, capitalizing on investor hunger to get into the new sector, which U.S. News called “a bright spot in an otherwise bleak 2025 equity market.”
In 2023, Blackstone and Digital Realty announced a $7 billion joint venture to partner with data center providers to build even more. Blackstone owns QTS Data Centers, which has nine campuses in Northern Virginia and plans to be part of the Prince William Digital Gateway, whose approval is stuck in the courts.
As the pressure hikes real estate values, some with luck or vision have reaped windfalls.
On Feb. 7, 2024, Microsoft set a new per-acre purchase record when it bought 124 acres at Wellington Road and University Boulevard for $440.5 million, or $3.5 million an acre.
But that paled next to the profit made on the sale.
A company affiliated with developer Chuck Kuhn had bought the property four years earlier for $46.9 million. Excluding development costs, the company made $393 million.
In July 2023, a price record was set in Fauquier County when CyrusOne Data Centers of Dallas bought 48 acres on Vint Hill for $89.4 million, or nearly $2 million an acre. The previous record was about $1 million an acre when Amazon bought 42 acres in Warrenton.
But again, the real eye-opener was the deal. The previous owner, Blue Rock I, a subsidiary of Zumot Real Estate Management of McLean, bought the land in September 2021 for $8.75 million, according to county land records.
“They got 10-fold their money in 18 months,” said Bill Chipman, a Warrenton commercial real estate broker who is listing another property for data center use.
The developers of Gigaland, a seven-building data center project planned near Remington, paid $3.77 million in 2023 for 207 acres they are trying to get rezoned. If they obtain all needed permits, they have indicated they plan to sell the property to Equinix, a global data center operator, for construction. Data center land in Fauquier has sold at $1 million an acre.
Roland Talalas, one of the two partners developing the property, said it was unclear what it would sell for, as data center land is worth less the farther it is from Ashburn and Data Center Alley. “So in Culpeper you start seeing 500, 700 [thousand dollars an acre] and the farther away you go, the prices tend to go down,” he said. Still, if they sold their 200 acres for $500,000 each, they would gross $100 million.
Politicians Get Huge Gifts
With so much money flowing, data centers and allied interests donate to political campaigns to ensure that officials friendly to their interests are elected.
The big data center companies – Microsoft, Amazon, Google and the like – invest heavily at the state level, where proposed bills may affect their entire industry.
At the local level, the campaign donors are developers, realtors, labor unions and property owners looking to make a killing.
A big race in Prince William County in 2023 was for the chair of the board of supervisors. Ann Wheeler, who had supported data center development, was running again.
Developer Kuhn gave her $5,000. Stanley Martin Homes, with a data center project in the wings, gave $5,000. Jeff Mulhausen, a McLean data center developer, gave her $10,000. Other developers’ giving totaled at least $51,000. Prince Wiliam Forward, a committee formed by developers and real estate interests, donated $44,000. Electricians’ unions donated $67,500; other trades gave $23,000 more.
Wheeler lost. The victor, Deshundra Jefferson, was backed by anti-data center forces.
Four other supervisors who had supported data centers were helped by Virginia Del. Luke Torian, who represents eastern Prince William County and is chair of the House Appropriations Committee. Torian passed to the supervisors money he had raised from a Prince William Digital Gateway landowner, Stanley Martin Homes and Dominion Energy – which handed him $270,000 that year.
“I have not made contributions to candidates because of the positions that they support,” says Del. Luke Torian. “It's just that those are candidates that I believe in.” Photo: Ned Oliver/Virginia Mercury.
Torian gave $65,299 to Democratic candidates, including incumbents Kenny Boddye, D-Occoquan; Margaret Franklin, D-Woodbridge; Andrea Bailey, D-Potomac; and Victor Angry, D-Neabsco. They all won, and continued to support data center expansion.
“I do support data centers for economic reasons,” Torian said in an interview. “But I have not made contributions to candidates because of the positions that they support. It's just that those are candidates that I believe in.”
At the state level, data center interests have done even better. This year, as in 2024, they managed to defeat more than two dozen bills that would have made data center development more difficult.
Dominion is the king of all state donors, giving $23.8 million from 2023 through Sept. 2025. The company also employs nine lobbyists and has 16 more on retainer.
“We give to candidates from both parties and all in support of common sense energy policy,” Ruby said, adding that energy policy affects its service to customers. “And so, we have a big stake in the public policymaking process, and we participate transparently.”
Data companies have been generous, too. Amazon, over the years, has given $2.2 million to state candidates, and Microsoft $963,000. Google has given $433,000; Meta has donated $415,000. All told, in the past decade data center companies large and small have donated more than $4.8 million to state lawmakers.
Did that influence their votes?
“All 40 senators, and all 40 and all 100 members of the House would tell you, ‘I'm voting on the merits of this bill. How could you impugn my integrity like that?” said Roem, who does not take money from for-profit companies. She saw all her data reform bills defeated in the Senate.
“But let's get real about this,” she said. “For-profit corporations, and their industries, donate to a campaign because they're trying to turn a profit off of the bills that we pass that affect them, and they're trying to kill bills that … would take profit away from them. That’s why they’re there. That’s why they hire lobbyists, that’s why they give.”
Investigative reporter Douglas Pasternak contributed to this report.
Peter Cary can be reached at pcary@fauquier.com.
A Project by the Fauquier Times and Prince William Times
Designed by GoodPoint