Blackstone-owned QTS has withdrawn its final appeal and abandoned its planned 22-million-square-foot Virginia Digital Gateway data center campus after years of litigation, ending one of the largest planned data center projects.
Data center developer QTS has officially terminated plans to build a portion of the planned 2,100-acre "Digital Gateway" data center campus in Virginia, following years of legal battles with local residents and historic preservation groups. According to a Bloomberg report, the Blackstone-owned company formally submitted a written filing to the Virginia Supreme Court on July 2, explicitly stating it was withdrawing its last remaining appeal "after careful consideration."
QTS's withdrawal marked the official end of the project, as other stakeholders had earlier pulled out due to prolonged litigation. The proposed land—situated at the edge of the Manassas National Battlefield Park, a historic Civil War battlefield—will now remain under its original rural zoning restrictions.
Digital Gateway was a planned 22-million-square-foot, gigawatt-scale data center complex in Prince William County, Virginia, that would have been the world's largest. QTS was responsible for more than 800 of the 2,100 acres, while a second developer, Compass Datacenters, controlled roughly 800 to 1,000 acres. The remainder of the designated zone consisted of local roadways, environmental buffer zones, and parcels belonging to individual homeowners who had agreed to sell.
Initially approved by the Prince William Board of County Supervisors to capitalize on soaring demand for AI and cloud computing, the project immediately faced fierce opposition from residents despite the promise of tens of billions of dollars in capital investment and substantial local tax revenue. Opponents argued that the facility's location adjacent to the Manassas National Battlefield Park posed severe threats to the area's environmental, historical, and residential landscape.
The project ultimately collapsed over an ironically small detail. Virginia courts voided the county's initial rezoning approval due to improper public notices. The newspaper notices publicizing the hearing at which the project was approved were not separated by at least six days, as mandated by state and local codes, thereby invalidating the hearing and the resulting approval.
Virginia courts upheld the invalidity of the zoning approvals in March of this year. Following the ruling, Prince William County refused to spend additional public funds to defend the project in court. Compass Data Center, the co-developer, withdrew from the project the following month, with the company president stating: "While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward."
Only QTS remained, filing an appeal with the Virginia Supreme Court. It has now withdrawn that appeal, leaving the entire Digital Gateway project completely dead. The company says it will "work on a responsible and orderly wind-down of development efforts."
The Digital Gateway case represents the latest victory for anti-data-center proponents. More than 75 data center build-outs worth $130 billion have been successfully blocked in the first quarter of 2026, though several others have moved forward. While data centers are essential to power AI's exponential growth, their development often raises valid concerns about water use, noise pollution, and electricity bill spikes for nearby residential areas. There has been an uptick in protests against data centers and a corresponding rise in companies pursuing alternative solutions. SpaceX is currently building an 11-million-square-foot Gigasat factory to manufacture orbital data centers, while several companies are deploying offshore data centers. Meanwhile, reports suggest that China may be artificially stoking opposition to data centers in the United States, even as the Trump administration pushes for AI development.