QTS Data Centers, a company owned by global investment firm Blackstone, has walked away from a 2,100-acre data center campus in Prince William county, Virginia. This follows a years-long battle with residents in the county per a court filing in the Supreme Court of Virginia. With the exit of QTS, the so-called Digital Gateway project is now dead in the water.
The campus would have comprised up to 37 data center facilities and a maximum projected capacity of 5 GW. The developers estimated that the project would have brought in some US$ 100 billion in spending in what would have been one of the largest technology corridors in the world.
The exit of the Blackstone-owned firm follows the exit of Compass Datacenters earlier this year which left QTS as the only firm working on the Digital Gateway project. Now alone on the project, QTS decided the juice was no longer worth the squeeze this week.
“After careful consideration, QTS has made the decision to terminate the Digital Gateway project and withdraw its associated filings,” the company wrote in a court filing. “As proposed, the project would have delivered significant infrastructure investment to Prince William County, including tens of billions of dollars in capital investment, substantial annual local tax revenues to support public services, and thousands of long-term jobs.”
The shuttering of the project has been heralded as a major win for civil society in Northern Virginia.
The project was challenged on the basis that the rezoning of agricultural and semi-rural land approved by the Prince William County’s Board of County Supervisors in December 2023 wasn’t conducted properly. This led to a lawsuit being filed by the American Battlefield Trust and nine local residents in January 2024, and then another separate lawsuit by the Oak Valley Homeowners Association, whose lawsuit proved fatal.
In August 2025, Circuit Court Judge Kimberly Irving voided the rezoning, finding insufficient review of the proposed development, inadequate public notice and unlawful waivers of key analyses. The Virginia Court of Appeals upheld that decision on March 31, 2026, and the dominoes fell quickly thereafter. The county stopped defending the rezoning on April 14, Compass Datacenters exited later that month, and QTS petitioned the Supreme Court of Virginia in a final bid to save the project, which it has now withdrawn.
This matter is sure to send ripples through the data center sector which has faced increased scrutiny from residents nearby proposed and existing data centers in recent months.
However, despite this blow to the sector, the Northern Virginia market continues to attract data center investment thanks to improved fiber density and tax incentives in the state. According to a Mordor Intelligence report, the market is expected to grow to 20.32 GW in 2026, with that capacity expected to more than double to 43.52 GW by 2031 at a CAGR of 3.38 percent. While the QTS exit is notable, it’s unlikely to deter investors and data center operators from the region where the bulk of the world’s internet traffic flows through.