Blackstone-owned data center operator QTS has terminated its Digital Gateway project in Prince William County, Virginia, withdrawing its final Virginia Supreme Court appeal on July 2, 2026 and killing what would have been one of the largest hyperscale campuses ever built. The 2,100-acre site next to Manassas National Battlefield was slated to deliver more than 22 million square feet of data center space before a public-notice technicality gutted the rezoning.
Four Years of Litigation Ends in Withdrawal
Prince William supervisors approved the rezoning in a narrow vote after a 27-hour public hearing in December 2023. The Oak Valley Homeowners Association and American Battlefield Trust sued almost immediately, arguing the county failed to publish adequate public notice. A circuit court judge voided the approval in August 2025 and the Virginia Court of Appeals unanimously upheld the ruling in March. Prince William County and co-developer Compass dropped out of the litigation earlier this year, leaving QTS to fight alone before it too walked away.
What Virginia Loses - And Doesn't
QTS said the campus would have delivered tens of billions in capital investment, substantial recurring local tax revenue and thousands of long-term jobs. The company stressed that Virginia remains central to its business, citing roughly $5 billion invested in the Richmond area. Blackstone's broader AI infrastructure playbook is untouched: it is still preparing a data-center REIT IPO and running its large-scale AI joint venture with Google around custom TPUs.
A National Backlash Gets a Marquee Scalp
Digital Gateway lands in a broader wave. Roughly 75 US data center projects were blocked or delayed in Q1 2026 alone, and community groups have organised harder around power draw, water use and noise as hyperscale AI campuses scale past a gigawatt. Coming just days after Valar Atomics and NVIDIA's Utah microreactor deal and National Grid's $1.75B Joulent investment, the Digital Gateway collapse underscores that AI's biggest 2026 constraint may not be chips - it may be the political permission to build the campuses that host them.
Reporting based on coverage from Bloomberg, Financial Times, Tom's Hardware and The Next Web.