As Google plans to funnel $1 billion into Northern Virginia data centers, places such as Arlington may have renewed opportunities to attract tech investment.
Although the data center expansions announced last week are based in Loudoun County and Prince William County, they impact the entire area, said Terry Clower, director of George Mason University’s Center for Regional Analysis.
With a torrent of funds for similar infrastructure flowing into the D.C. area, and Amazon still planning its HQ2 expansion in Arlington, the region could be primed to solidify its status as a “cluster of activity” for big tech.
“To me, the data centers are part of the infrastructure of the future that will allow us to take advantage of the promise that we bought into with HQ2,” Clower said.
Not everyone is so enthusiastic, however. Growing quality-of-life concerns about data centers have some localities reevaluating big tech’s role in their communities and, ultimately, Northern Virginia as a whole.
Data centers and big tech
Even before Google announced its investment, other data center kingpins had been making strides in Northern Virginia this year.
In February, Digital Realty Trust filed paperwork to grow its Loudoun County presence by up to 11.7 million square feet. Microsoft followed that with a $465 million data center land deal in Prince William County.
The continued growth in Northern Virginia data centers parallels the growth in artificial intelligence, which brings with it higher computing needs. AI-related employment in the D.C. area, meanwhile, is on the rise and reportedly rivaled only by California.
Such developments, in Clower’s view, encourage tech investors of all stripes.
“Having the data centers around here is going to make us more attractive for those bleeding-edge companies that are going to be developing this,” he said.
There are practical reasons for this. Being close to servers reduces delays when companies handle extremely large data packets. Moreover, Clower said, “data owners want to be close to these centers.”
He believes Northern Virginia’s role as the data center capital of the world could attract future tech growth in places including Arlington — depending, in part, on how localities play their cards in an increasingly competitive market.
“Trust me, Ohio wants it,” Clower said, referring to investment into data infrastructure. “Texas wants it. Arizona wants it.”
A question is how much Northern Virginia wants it.
Following concerns about energy consumption, noise and greenhouse gas emissions, Fairfax County is in the process of drafting stricter zoning regulations related to data centers. And last month, the Loudoun County Board of Supervisors approved a data center campus in Ashburn a quarter the size of what developers wanted.
Lacking the land for sprawling campuses, Arlington has mostly stayed out of the data center game. Unlike in Fairfax County, the Arlington County Zoning Ordinance makes no mention of the information hubs.
But not all data centers require large amounts of land. In 2022, for instance, Amazon got permission from Fairfax County to build a center at the site of a former office building.
“The industry and the technologies are evolving quickly,” Clower noted. “It’s hard to keep on top of it.”
HQ2 development continues
While building data facilities in Fairfax County, Amazon is steadily growing its presence in Arlington.
Despite flagging employment numbers at HQ2 in 2023, the company says it is still seeking to bring at least 25,000 jobs to the area by 2038.
“While our hiring has slowed, HQ2 was always meant to be a multi-year project and long-term investment, and that remains unchanged,” Holly Sullivan, Amazon’s vice president of worldwide economic development, tells ARLnow.
About 8,000 people currently work at HQ2. The company has more than 1,000 open positions at the headquarters and has begun utility work on the planned second phase of its Pentagon City campus. There’s still no word, however, on when the bulk of construction could begin on the “PenPlace” site, which will host the distinctive Helix tower.
“There are no updates on timing for the second phase of HQ2 at this time,” Sullivan said. “Our long-term commitment to HQ2 and the region remains unchanged.”