Virginia data center boom faces Texas competition
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Texas seems to be trying to oust Virginia from its spot as the data center capital of the world.
Why it matters: The Lone Star state is positioning itself as one of the nation's most data center-friendly states as Virginia lawmakers debate ending the massive tax break that helped land it at No. 1.
State of play: With low electricity prices and an abundance of land, Texas is drawing a wave of data center investment amid the AI buildout boom, Axios' Maria Curi reports.
- Texas has 157 data centers under construction and another 651 that have been announced, according to the latest stats from data firm Aterio.
- Virginia has 141 under construction and 508 that have been announced.
Reality check: Virginia still leads the nation — with 319 operating data centers compared to Texas' 212, per Aterio.
Follow the money: Texas offers tax incentives currently worth more than $1 billion annually, compared to Virginia's $1.6 billion. But by 2030, Texas will have the most expensive data center tax break in the nation, The Texas Tribune reports.
- Meanwhile, the debate over whether Virginia will keep its data center tax incentive is holding up the state budget.
- Lawmakers were expected to meet this week to hammer out the details. Now they say there likely won't be an agreement and budget until June, per Cardinal News.
Zoom in: While Richmond residents are increasingly pushing back on data centers due to their voracious energy and water usage, for some localities, the tax benefits they bring are too lucrative to pass up.
- Last year, the Powhatan County Board of Supervisors unanimously voted to approve a California-based developer's proposal to expand a data center in the works there — after its planning commission unanimously recommended that they reject it.
- The tax revenue the county would get from the data center offered a "transformative fiscal opportunity" for Powhatan, BizSense reported.
And last week, Hanover County's planning commission voted 6-1 to recommend approval of a 430-acre data center project despite vocal community opposition and delaying the vote twice, per BizSense.
- That project is expected to generate $900 million in tax revenue for the county over 20 years, VPM reports.