Data Centers in Virginia

Virginia – The World's Data Center Capital

Executive Summary

Virginia is the largest and most important data center market in the world. Its unmatched density of fiber, cloud on-ramps, and colocation facilities makes it the primary choice for enterprises, hyperscalers, and government agencies that require maximum uptime and low-latency connectivity to the Eastern United States and global networks. Deploying in Virginia ensures superior performance and scalability for mission-critical applications.

Virginia: At A Glance

Network & Connectivity Ecosystem

Virginia's connectivity is second to none, serving as the digital crossroads for a massive volume of the world's internet traffic.

Carrier Density & Carrier Neutrality: The market features over 115 unique network service providers as of September 2025. This deep carrier ecosystem provides extensive choice for colocation customers seeking resilient network architectures and competitive pricing.

Direct Cloud On-Ramps: With over 10 cloud on-ramps and access to 16 cloud regions, Virginia offers direct, low-latency connections to all major public clouds. Providers with dedicated access points include AWS, Google Cloud (GCP), Microsoft Azure, IBM Cloud, and Oracle Cloud.

Internet Exchange Points (IXPs): While public IXPs exist, the vast majority of peering in Northern Virginia occurs privately between networks inside data centers. This direct interconnection model is a hallmark of the market's maturity and scale, offering the lowest possible latency.

Bare Metal: Bare metal cloud solutions are readily available from multiple providers. Companies like Hivelocity and phoenixNAP offer dedicated servers that give customers direct access to Virginia's powerful connectivity ecosystem.

Power Analysis

Virginia's power infrastructure is purpose-built to support the immense needs of the data center industry, particularly in Loudoun County, also known as Data Center Alley.

Average Cost Of Power: Industrial electricity rates typically range from $0.06 to $0.08 per kWh as of September 2025. These competitive costs are a significant factor in lowering the total cost of ownership for large-scale deployments.

Power Grid Reliability: The electrical grid, particularly in Northern Virginia, is exceptionally reliable and well-engineered. Data centers are supported by redundant substations and high-capacity transmission lines designed to meet the uptime requirements of the world's most demanding digital services.

Market Access, Business & Tax Climate

Virginia combines strategic location with a highly favorable business environment for technology infrastructure.

Proximity To Key Business Districts: Data centers in Northern Virginia offer low-latency connectivity to the Washington D.C. metropolitan area, serving a dense concentration of federal government agencies, systems integrators, and Fortune 500 companies.

Regional Market Reach: The state serves as a primary digital hub for the entire Mid-Atlantic and a large portion of the Eastern Seaboard, reaching tens of millions of end-users with minimal delay.

Tax Advantage For Data Centers: Virginia offers a significant sales and use tax exemption on qualifying data center equipment. This incentive directly reduces the capital expenditure required for new builds and hardware refreshes, making the state financially attractive for infrastructure investment.

Natural Disaster Risk

Virginia has a moderate risk profile for natural disasters, with a FEMA National Risk Index score of 27.17 as of September 2025. The primary environmental threats are predictable and can be mitigated with standard data center engineering and operational planning.

Key risks include hurricanes and associated high winds, riverine flooding, hail, and winter storms. Other risks such as earthquakes and tornadoes are present but historically less frequent or severe. The state's inland data center corridors are well-protected from direct coastal threats.