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By Lauren Giella
Senior Reporter
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Virginia Governor Abigail Spanberger laid out her 2027 legislative agenda with the commonwealth's top Democrats this week. Among the many plans and proposals, the governor is taking on data centers and building on her 2026 executive order that requires increased transparency from developers, environmental protections and job creation for Virginians.
Virginia Democrats' Data Center Agenda
The agenda specifically bans non-disclosure agreements that would prevent data center developers from silencing members of local staff, board supervisors, planning commissions or zoning boards. It also allows residents to have a bigger voice in what gets developed in their communities by requiring local approval for any data center using more than 25 megawatts of power, regardless of any prior approval.
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Spanberger also pledges to enact stronger enforcement and regulation to protect natural resources and protect workers' salaries from AI tools that would set lower wages based on surveillance data and personal assumptions.
According to PEW, Virginia has the highest number of active and planned data centers in the country, giving places like Loudoun County in the northern part of the state the nickname "Data Center Alley." There are currently 398 data centers currently active and 287 more planned. But in recent years, land scarcity and community pushback against costs and environmental impacts has prompted a new era that aligns with the agenda for Democratically controlled state government.
Virginia’s recently introduced Data Center Oversight Act would also require data center operators to disclose ownership, water and energy usage and costs that could be passed along to utility customers or risk up to a $1 million fine per day for failed compliance. And back in September, Governor Spanberger issued an executive order that outlined her new Data Center Accountability Framework to increase regulations on the AI industry in Virginia and set the standard “for what responsible data center development means."
“In the years before I took office, data centers came to Virginia and the Commonwealth did not have a clear or coordinated plan to address their impacts on Virginians — on their electric bills, their water, their land, their air, or their quality of life,” Spanberger said in a statement at the time**.** “That changes today. I have said many times that Virginia should be leading the nation in setting the highest standards for this industry. And now, I believe we are doing just that.”
Striking the Right Regulatory Balance
Joe Luppino-Esposito is the federal policy director of Pacific Legal Foundation and a resident in Loudoun County Virginia. He understands both the benefits and negative impacts of sharing a zip code with a data center and, therefore, believes that the best regulatory strategies will strike a balance between economic growth and community protections.
Residents raise valid concerns about noise, pollution, land use and rising utility costs. But Luppino-Esposito said some of those complaints fall under the "shaking your fist at a cloud" grievances rather than concrete issues that can be improved upon.
"I think that's really the question that the government has now: Are they going to be doing regulations that are just slowing [data centers] down for slowing them down's sake, or is there really something they're doing that's improving the life of residents?" he told Newsweek.
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Virginia's Data Center History
Virginia has long-been a hotbed for data center development. It started back nearly 30 years ago when American Online, or AOL, moved to Ashburn, VA, in 1997. That move opened pathways for other internet companies like UUNet/WorldCom and the Metropolitan Area Ethernet East to plant roots in the area. Favorable tax policies dating back to 2010 also incentivize data center development, reducing operational costs and allowing for more growth through at least 2035.
But as Loudoun County resident and president of Community Digital Technologies Mital Gandhi told Newsweek, "Virginia didn't win data centers with the tax break. They won them with fiber." The proximity to the nation’s capital brings high demand for fast, secure and reliable data processing for government agencies and contractors that laid the foundation for a tech infrastructure that could support development.
Gandhi's company works with people living near data centers to get them direct economic benefits from industrial development in their neighborhoods.
The Virginia Joint Legislative Audit and Review Commission (JLARC) found that data centers generate significant revenues for communities that house them, creating an estimated 74,000 jobs, $5.5 billion in labor income and contributed $9.1 billion to Virginia's annual GDP. According to JLARC, Virginia accounts for approximately 13 percent of global operational data center capacity and about a fourth of capacity across the Americas.
Former Governor Glenn Youngkin was a champion for AI development in the state, signing an executive order to integrate AI across government agencies, schools and law enforcement and enacting a generative AI tool to streamline state regulatory operations. He also oversaw a $9 billion investment from Google to fund the expansion of data centers to support a growing AI infrastructure and vetoed a 2025 bill that would have enacted greater oversight on high-risk AI systems.
But by the end of 2025, state data shows those tax breaks costs the state nearly $2 billion. In that time, the state only gained 1,610 new jobs. Early this year, Spanberger put an end to the tax cut and instead enacted a $600 million annual tax on data centers' electricity use. The money then would fund other budgetary costs and service improvements across the state.
The Future of Data Center Regulation
As the debate about how to best regulate data center continues in states across the country, Gandhi said government must keep their promise to govern for their constituents. And data centers must keep their promises to be good neighbors.
For that to happen, the voices of those directly impacted cannot be forgotten.
"They need to have a specific focus on the immediate neighbors that house these data centers — that's what's missing and that's what I'm hoping 2027 will fix, and other states will fix as well,” he said.
This means governments have to make sure the communities surrounding data centers not only feel heard, but see some economic benefit from the tax breaks and other industrial incentives.
“That's what our entire premise of our business is: take care of the neighbors right around the data centers, because when you do that, you're going to turn folks who don't want to live near data centers into people [who] want to live next to data centers," he said.
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