Blackstone’s QTS has canceled its Digital Gateway data center project in Virginia.

      QTS, the data centre operator owned by Blackstone, has called off its Digital Gateway project in Prince William County, Virginia, and has rescinded the legal filings that were sustaining it. This decision, confirmed on Thursday, concludes a struggle that had already persisted longer than that of most involved parties.

      The project, which was given the green light in December 2023, was set to become one of the largest data centre campuses worldwide, covering approximately 2,000 acres near Gainesville and Manassas, adjacent to Manassas National Battlefield Park. When fully developed, it would have provided over 22 million square feet of data centre space, significantly surpassing most current campuses and contributing to a surge of development that has made Virginia the most densely populated data centre market globally.

      Achieving this approval required a lengthy 27-hour public hearing and a divisive vote. The Prince William Board of County Supervisors narrowly approved the rezoning following that extended session in December 2023, but the decision was promptly challenged by two separate entities, the Oak Valley Homeowners Association and the American Battlefield Trust, both contending that the county did not provide adequate public notification before the vote.

      They succeeded. A judge in the Prince William County Circuit Court ruled last August that the rezoning approvals were invalid due to the lack of proper notice, and the ruling was unanimously upheld by the Virginia Court of Appeals in March.

      Earlier this year, both Prince William County and co-developer Compass withdrew from the litigation instead of continuing the fight, leaving QTS as the only party pursuing an appeal, this time to the Virginia Supreme Court. Thursday’s withdrawal closes off that final option.

      QTS highlighted the implications of the loss in terms of what the region will miss out on. The company stated that the project would have brought tens of billions of dollars in capital investment, significant annual local tax revenue, and thousands of long-term jobs.

      Despite this setback, the company emphasized that Virginia remains crucial to its operations, citing approximately $5 billion already invested in the Richmond area as proof that it is not abandoning the state entirely.

      None of the parties that engaged in a four-year struggle over Digital Gateway achieved their initial goals. The county lost a standout project it had approved following an all-night hearing. The opposition groups triumphed, but only after judicial intervention reversed a decision made by the supervisors.

      The termination fits within a larger backlash against data centre expansion that has emerged across the United States, driven by the surging demand for AI and cloud services leading to an unprecedented construction boom. Communities near proposed sites have increasingly organized against projects, raising concerns over electricity and water use, noise, and land utilization, as documented in our report on approximately 75 data centre projects that were blocked or delayed nationwide in the first quarter of this year alone.

      Given its magnitude and proximity to a Civil War battlefield, Digital Gateway became one of the most closely monitored conflicts within this movement. Nevertheless, Blackstone's broader ambitions in the data centre field remain very much alive elsewhere. The firm has been investing in AI infrastructure well beyond QTS, including plans for a data centre real estate investment trust and a significant stake in a cloud computing venture with Google centered around Google's specialized chips.

      The collapse of Digital Gateway represents a loss for a single project rather than a withdrawal from the industry. The fate of the approximately 2,000 acres of rezoned land now remains uncertain. More than a hundred landowners who had entered into agreements linked to the project have spent months in limbo while the litigation pursued, and Thursday’s withdrawal officially eliminates the route that would have turned their land into part of the campus.

      Moving forward, Prince William County will determine the future of a site that has been the most hotly debated area of rural Virginia for the past four years.