AWS Commits To Spending $35B On Virginia Data Centers With New State Incentives

Amazon Web Services intends to crank up its data center spending in Virginia, landing some tax breaks and government cash in return. 

AWS will invest an additional $35B in new data center campuses in Virginia by 2040, Gov. Glenn Youngkin’s office announced Friday. The administration was short on specifics as to AWS’ plans, saying only that the new facilities will create at least 1,000 jobs and that the location of these planned data centers will be determined “at a later date.”

In announcing AWS’ plans, the governor’s office also unveiled a proposed expansion of Virginia’s incentive program for data centers that, pending legislative approval, could net the cloud computing giant more than $100M in cash grants.

“AWS has a significant presence in Virginia, and we are excited that AWS has chosen to continue their growth and expand their footprint across the Commonwealth,” Youngkin said in a statement. “Virginia will continue to encourage the development of this new generation of data center campuses across multiple regions of the Commonwealth.”

AWS’ proposed build-out in Virginia will add to a substantial footprint across the state that is already seeing rapid expansion. In the past year, the company has purchased developable land on three different sites in Loudoun and Prince William counties, with planned expansion of existing campuses in Warrenton, Stevensburg, Chantilly, Manassas, Bristow and Stone Ridge.

Amazon as a whole is one of Virginia’s largest employers, with the first new buildings set to deliver at HQ2 in Arlington. 

The announcement from Youngkin’s office Friday suggests that AWS’ latest investment in the state hinges on what the administration is calling the “Mega Data Center Incentive Program.” 

Developed through the state’s economic development office and the legislative Major Employment and Investment Project Approval Commission, the incentive package would make AWS eligible to receive a “performance grant” of up to $140M for site and infrastructure improvements and other project-related costs. Virginia’s well-known data center tax incentives, set to expire in 2035, would also be extended by 15 years, according to the governor’s office. 

The proposed incentive package positions the governor as a data center booster at a crucial time for the industry in the state. Virginia is still the largest data center market in the world, but its position as the world’s digital infrastructure hub may be more tenuous than ever before. One of the main factors making data center development difficult in Virginia: growing local pushback and political opposition to new data center developments is on the rise. 

AWS has faced growing organized resistance to projects in Virginia, most recently in Prince William, Culpeper and Fauquier counties. And just this month, a pair of Virginia lawmakers submitted legislation intended to kill the controversial PW Digital Gateway in Prince William County, which would open more than 2,000 acres to data center builders.