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Amazon Web Services Plans to Invest $35 Billion in Virginia Data Centers

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Virginia Governor Glenn Youngkin announced on Friday that Amazon Web Services plans to invest $35 billion in new data centers in the state by 2040, resulting in the largest economic investment in the history of the community.

The legislature has yet to pass millions of dollars in incentives, but a press release from the governor’s office said General Assembly leaders from both parties support the pending deal.

According to the Associated Press, if approved, Amazon would receive incentives from a new Mega Data Center Incentive Program and a grant of up to $140 million for on-site workforce development improvements and other costs.

In a tweet, Youngkin said the investment is expected to generate more than 1,000 jobs statewide, significantly fewer than the 25,000 jobs that came with Amazon’s decision to build a second headquarters in Arlington County in 2018.

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Virginia Governor Glenn Youngkin

Virginia Governor Glenn Youngkin delivers his State of the Commonwealth address to a joint session of the Virginia legislature in the House chamber in Richmond, Virginia, January 11, 2023. (AP photo/John C. Clark)

The exact amount of the grant will be determined by how many jobs are created, as set out in legislation under consideration by the General Assembly, the AP reported. It will also include temporary exemptions from a sales and use tax imposed on Virginia data centers.

Youngkin’s office said the data center locations will be determined at a later date. Newly proposed bills in the state legislature would increase regulations about where centers can be built.

Data centers have become a politically volatile subject, especially in Northern Virginia (NOVA), where structures are seemingly everywhere. Loudoun County, also known as “Data Center Alley,” has the highest concentration of data centers in the country, with 115 out of 27 million square feet of operating space, according to Dgtl Infra.

While tech companies prefer the NOVA area because of the area’s history as a grid hotspot, many residents have spoken out about the noise and environmental concerns that come with the influx of structures.

Data centers, which house computer servers and hardware needed to support Internet usage, require high-powered fans and ample cooling capabilities that can be quite noisy, the AP said. They also consume large amounts of electricity which may require the construction of high voltage transmission lines to support them.

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Protesters Against Data Centers in Northern Virginia

Spencer Snakard, president of Protect Fauquier, speaks on August 29, 2022, at a rally near Manassas, Virginia, protesting a newly built data center for Amazon Web Services. (AP Photo/Mateus Barakat)

Prince William County resident Bill Wright, who has opposed a massive data center expansion recently approved by the county despite opposition within the community, said Friday’s announcement proves that the influence of big tech money became “intoxicating for our politicians”.

While he’s not opposed to data centers as a whole, Wright told the AP he hopes the state will place them in areas that don’t harm the environment and in rural areas where jobs are needed.

“Northern Virginia is being taken over by these things,” he said. “We might as well start calling ourselves the Commonwealth of Amazon.”

He also said he is skeptical the state will stand up to tech companies that want centers in northern Virginia.

State Senator Chap Petersen, D-Fairfax, is the sponsor of a bill restricting the placement of data centers near natural or historic resources.

“In my opinion, data centers are short-term financial gains with long-term environmental consequences. Industrial buildings without real workers are not the economy of the future,” he said. “In fact, they could be obsolete within a decade. Meanwhile, we are losing valuable farmland and historic sites.”

Petersen said Virginia is at risk of being overwhelmed by data centers if safeguards are not implemented.

Amazon helmets in front of a crane

Helmets with Amazon logos at the company’s HQ2 development site during construction in Metropolitan Park in Arlington, Virginia, on Wednesday, November 17, 2021. (Pete Kiehart/Bloomberg via Getty Images)

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Suzanne Clark, a spokeswoman for the Virginia Economic Development Partnership, said Amazon Web Services is exploring several sites “in collaboration with the Commonwealth,” but specific sites were not provided.

An Amazon Web Services spokesman did not specify how many data centers are planned or Amazon’s location preferences.

The Associated Press contributed to this report.

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