Amazon launches a $35 billion data center expansion in Virginia

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Amazon announced Friday that it will spend $35 billion over the next two decades to expand its data center business across Virginia, adding at least 1,000 jobs to a rapidly growing, lucrative industry in the state’s northern suburbs.

If approved by Virginia lawmakers, the tech giant’s cloud computing arm, Amazon Web Services (AWS), would receive up to $140 million in economic incentives from the state and up to 15 years of tax credits for equipment and software. (Amazon founder Jeff Bezos owns The Washington Post.)

“AWS has a significant presence in Virginia, and we are excited that AWS has chosen to continue its growth and expand its presence across the Commonwealth,” Gov. Glenn Youngkin (R) 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.”

Yongkin’s statement said that “several locations” are under study for the new data center campuses and will be selected at a later date. Neither AWS nor Virginia Economic Development Partnership (VEDP) He said how many sites had been considered and how many would ultimately be selected.

Data centers, which act as the physical home for cloud computing and data storage, contain hundreds or thousands of computer servers in nondescript, highly secure buildings equipped with backup generators and elaborate cooling systems to reduce heat.

More than 275 of these facilities are believed to be located in Northern Virginia—particularly in Ashburn, which is sometimes known as “data center alley”—thanks to the area’s dense network connectivity, business-friendly policies, and easy access to land and electricity.

Many local officials promoted the industry to increase local tax revenues, but not to grow it in the region It was not without controversy. As companies like AWS acquire land to meet growing demand, some residents are in affluent suburbs They complained about noise and the impacts on water and property values ​​and the high-voltage transmission lines needed to operate data centers.

A battle over turning the Rural Crescent in Northern Virginia into a hub for data centers

Del said. Mark Sickles (D-Fairfax), who sits on the legislative committee that negotiated economic stimulus, said the expansion aims to bring data center campuses to “small-town, rural Virginia,” where the industry has yet to take off in a similar fashion.

Amid raging battles over data centers in areas like the Rural Crescent in Prince William County, he noted, local legislators in every county or city being considered for a college campus will likely be involved in deciding where to locate the facility.

“everyone of them [data center campuses] It will likely generate local discussion, “but hopefully there will be discussion about how to make it work for everyone.”

The smaller number of data centers being built in less prosperous parts of the state appears to have been hampered by a few residents — with lower land prices, too.

Microsoft has invested nearly $2 billion in a massive datacenter campus in Mecklenburg County and has Scheme to build more facilities in other parts of Southside Virginia. Henrico County, on the outskirts of Richmond, has also seen a rush in data center development: Facebook parent company Meta has created Great facility there in 2020.

And officials in Virginia Beach, where new submarine cables to Europe and Africa provide extraordinarily fast connections to data centers, recently cut their taxes in a bid to attract more of these facilities.

Roger Weiner, director of economic development at AWS, said the expansion will add to Virginia’s position as a leader in the cloud computing industry and strengthen the company’s presence in the state.

“Virginia is a world leader in innovation and cloud computing, thanks to its investment in a strong, highly skilled workforce and focus on long-term public-private partnerships,” he said in a statement.

Wehner added that AWS has invested more than $35 billion in the state since building its first data centers in Virginia in 2006. Now Amazon is one of the largest private sector employers in Virginia. Building a second headquarters In Arlington, with another $750 million in state subsidies potentially on the table.

Some observers of economic development have criticized the deal, pointing out that each data center employs no more than a handful of people when fully operational.

John C. Muzina of the Michigan Economic Accountability Center said, “The principal amount of money isn’t really tied to the benefits that happen at the local level. If all these billions of dollars are spent elsewhere, it doesn’t mean it benefits the state.”

The news comes as Yongkin said last week that he rejected efforts by Ford Motor Co. to consider establishing a battery electric plant in Virginia, citing concerns about potential security risks given the automaker’s partnership with China.

Antonio Olivo contributed to this report.

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