Where does data-center construction spending go?

JLARC found that 68% of Virginia data-center investment was IT and mechanical equipment, largely sourced from outside the state, while the remaining share covers site work, building shells, and construction labor and materials that stay closer to the local economy (2024).

Do data centers pay local taxes?

Yes, though the amount varies widely by jurisdiction. Loudoun County, Virginia's most concentrated data-center market, reports that data centers generate 38% of its General Fund revenue, and Virginia's sales-tax exemption on qualifying equipment saved the industry $928 million in FY2023 alone (2026).

Why can't a national price series show an AI construction effect?

Government construction-cost indexes combine data-center building with factories, warehouses, infrastructure and general commercial construction. A single regional cluster of hyperscale projects can dominate its local market without moving a national average enough to be visible in the aggregate series.

All resource ledgers

Local buildout · resource ledger

How much do AI data centers cost to build, and do they raise construction costs?

ContestedNo clean seriesnational AI-attributable price measure

No single national price series isolates an AI effect on construction costs. In Virginia, JLARC found data centers were 84% of announced economic-development capital investment in FY2022 to FY2024, though 68% of that investment was IT and mechanical equipment sourced mostly outside the state (2024). Grade: Contested.

ContestedChecked 2026-07-17 · next review 2026-11-06 · reviewed by David Veksler

Key numbers
Value	Measures	Source	Grade
84% / 68%	share of announced Virginia development investment / share spent on IT and mechanical equipment	Virginia Joint Legislative Audit and Review Commission (2024)	Background
38%	of Loudoun County’s FY2026 General Fund revenue generated by data centers	Loudoun County, Virginia (2025)	Background

How does AI demand affect this market?

A hyperscale project is a large, time-sensitive buyer in its local labor and materials market. National averages obscure this concentrated demand.

Who pays, and who benefits?

Nearby industrial, public and commercial projects compete for the same bids and schedules. Suppliers and construction workers gain volume.

What limits supply?

Local ready-mix radius, specialized MEP contractors, permitting, land and the timing of simultaneous megaprojects.

What the evidence cannot show

Reports from a single data-center corridor are not enough to support a national claim.

What would change the grade

Confirmed project dates, construction prices, permits and bids in matched regions determine the grade.

Sources