Largest Data Center Project Ever Proposed Is Officially Dead
By Charles Kennedy - Jul 04, 2026, 2:00 PM CDT
- QTS withdrew its Virginia Supreme Court appeal on July 2, killing the 2,100-acre, roughly $100 billion Digital Gateway campus for good.
- The retreat follows a March court ruling that voided the project's 2023 rezoning over a notice error, and lands days after Blackstone sold a majority stake in three other Northern Virginia data centers to Digital Realty.
- Blackstone's broader data center business is unaffected: it still manages more than $150 billion in digital infrastructure assets and just took its acquisition REIT public in May.
The largest data center project ever proposed in the U.S. is officially dead.
Blackstone-owned QTS Realty Trust withdrew its appeal to the Virginia Supreme Court on July 2, closing out a three-year legal fight over the Prince William Digital Gateway, a planned 2,100-acre campus in Prince William County, Virginia that would have packed 37 buildings and 22 million square feet of data centers next to Manassas National Battlefield Park. At full build-out, the project carried an estimated $100 billion price tag and would have been the largest data center complex in the world.
QTS was the last developer standing. Co-developer Compass Datacenters, backed by Brookfield, dropped its own appeal in April, and the Prince William Board of County Supervisors withdrew from the litigation the same month after spending nearly $2 million in taxpayer funds defending the original rezoning. That approval, granted in 2023, was voided by the Virginia Court of Appeals in March, which found the county's public notice for the rezoning hearing fell short of the state's six-day spacing requirement between newspaper notices.
In its withdrawal filing, QTS said the project had "advanced through years of planning, analysis, and public review" and would have delivered tens of billions of dollars in capital investment and thousands of jobs to the county. The company added that Virginia remains central to its business, pointing to $5 billion in ongoing investment in the Richmond region on top of its existing Northern Virginia footprint.
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The retreat comes days after Blackstone agreed to hand Digital Realty full ownership of three built-and-leased Northern Virginia data centers valued at $7.8 billion, in a $3.5 billion cash-and-stock deal. That transaction extends an existing joint venture rather than an exit, but the timing puts fresh attention on how Blackstone is managing its data center bets in the state that hosts more capacity than anywhere else in the world.
Northern Virginia remains the industry's biggest hub, and the region's buildout keeps running into local resistance over land, water and grid strain. Several states have floated moratoriums or tighter permitting rules as utilities warn that data centers are driving an outsized share of new electricity demand, and grid operators in some regions have started asking developers to bring their own power generation rather than compete for scarce capacity. A Gallup survey released in May found 71% of Americans oppose data center construction in their area, with 48% strongly opposed, running higher than opposition to a local nuclear plant.
For Blackstone, the Digital Gateway collapse doesn't change the broader trajectory. The firm still manages a data center portfolio worth more than $150 billion globally, and in May it raised $1.75 billion taking its acquisition vehicle, Blackstone Digital Infrastructure Trust, public on the NYSE, to keep buying already-built, leased facilities tied to AI demand. What the Prince William outcome shows is that even the biggest players in the space can lose a fight over land use once local opposition organizes and the legal process runs its course.
By Charles Kennedy for Oilprice.com
