A $100 billion data-center campus in Virginia is dead - at least for now. Blackstone's subsidiary QTS walked away after a court ruling and a partner's exit made the project too risky to continue. The reversal caps five years of opposition from local residents who fought the development from the start.
The Project That Collapsed
The "Digital Gateway" campus was supposed to cover 2,100 acres in Prince William County, with QTS responsible for more than 800 of those acres. In 2023, a single zoning hearing about the project lasted 27 hours before the county board voted to approve the land-use change.
But the court system unraveled those approvals because the county failed to meet the minimum six-day gap between newspaper notices for zoning hearings. That clerical error opened the door for legal challenges that never closed.
Compass Datacenters, which had pulled out in May 2026, said in a statement: "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."
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Why QTS Pulled the Plug
After Compass left, QTS was the only developer left on the site. That meant it would have to pay the full cost of upgrading utilities - a massive expense that made the project uneconomical on its own. QTS executives concluded that continued legal battles were not worth the effort.
Blackstone acquired QTS in 2021. The private-equity firm's global data-center portfolio is now worth more than $150 billion. Earlier the same week the article was published, Blackstone sold stakes in three data centers in Northern Virginia for $3.5 billion.
What This Means for the Industry
The abandonment is a victory for community organizers who opposed the Digital Gateway project. The site sits near Manassas National Battlefield Park, and residents had spent five years fighting the development over concerns about noise, power use, and home prices.
The data-center industry as a whole faces growing headwinds. Local opposition is rising, power constraints are tightening, and Virginia has introduced new taxes on data centers. All of this could slow the pace of AI-related data-center construction. The issue is becoming a political topic ahead of US midterm elections.
Lawyers for QTS are expected to notify the court about the company's withdrawal during the first week of July 2026. The reversal closes a chapter on one of the largest proposed data-center campuses in the country.
What to Watch
Community activists in Prince William County have scored a major win, but the broader fight over data-center development in Virginia is far from over. Other projects face similar legal and political hurdles. The midterm elections could shape future zoning rules and tax policies.
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