Data center construction is shifting beyond Loudoun County, Virginia, part of the backbone of Virginia’s “data center alley,” according to a report from DC Byte.

In 2019, Loudoun County was responsible for 55 percent of both planned and live data center capacity in Virginia, with 2.9GW inside Loudoun and 2.3GW outside the county.

But in recent years Loudoun has seen a dramatic decrease in market share, making up just 26 percent of planned and live capacity in 2024 – 10GW of a nearly 40GW regional capacity – according to DC Byte. Some 28 percent of the capacity tracked in Loudoun was live in 2024, while the remaining 72 percent was still planned.

DC Byte analysts say this decrease is in large part due to ongoing power constraints, new zoning regulations, and community backlash.

Loudoun County, which, along with neighboring Fairfax County, Virginia, forms data center alley, reportedly sees around 70 percent of global Internet traffic.

Sprawling concern

Data center sprawl and power capacity issues have led to significant resident concern in Virginia and slowed overall data center growth in the state.

Recently, Loudoun County joined a number of other Virginia jurisdictions in restricting data center development.

In early 2025, legislation eliminating by-right development of data centers within the county was passed, forcing projects to meet additional approval steps, including legislative review and public hearings.

According to DC Byte analysts, Virginia on the whole is still on top, and this sea change has left the door open for other counties in the Old Dominion to take advantage of continuing data center expansion. Culpeper and Prince William counties, for example, have positioned themselves as successors to Loudoun.

However, counties looking to take part in the next era of Virginia’s data center construction are being forced to take community concerns more seriously.

Prince William County, for example, currently funnels construction into its “Data Center Opportunity Zone Overlay District.” But while some of its biggest projects, Devlin Technology Park and Prince William Digital Gateway, are stymied by litigation, the county is reportedly considering whether to eliminate the zone altogether.

Culpeper also recently established its own data center zone, the Culpeper Technology Zone, a 690-acre section of land that places all data center development in one area. DC Byte says this will allow data centers in the county to utilize existing power infrastructure and avoid controversy over data center sprawl.

Colby Cox, managing director for the Americas at DC Byte, said this progress “demonstrates that strategic planning and clear local frameworks can unlock long-term potential.”

“It’s an encouraging sign that Virginia’s market can continue expanding while addressing community and power concerns.”

Scotty, we need more power

Overall, demand in Virginia continues to rise, but brings with it significant power issues as demand outpaces supply.

Dominion Energy, Virginia’s primary electrical utility, has been working on significant expansion of its energy grid, with its total data center power capacity under contract almost doubling in just half a year.

Robert Blue, CEO of Dominion said power demand in the state is being driven, in large part, by heavy data center users. In November last year, the company reaffirmed its commitment to building new power generation to support the growing power demands of data centers in Virginia.

Dominion has also proposed a new rate class for data centers, applying to utility customers who consume more than 25MW of energy and have a monthly load factor of more than 75 percent.