Northern Virginia has for decades been the No. 1 U.S. data center market, with its digital infrastructure from the early internet age creating an industry hub, but artificial intelligence has changed the game.

Texas will surpass Virginia as the leading state for data center development by 2030, JLL projected this year, a sign that big AI data center projects dominating the headlines are going toward markets that have much more land and power.

But while Data Center Alley won't always be the biggest market, its digital infrastructure properties are still the most valuable.

"Ashburn is not going to be able to compete in megawatts with West Texas because it’s not an energy-producing area, but the unit rents will always be higher, and the vacancy rate will always be lower. Therefore, it’s a better investment, and therefore, anything you build here should price better," said John Sheputis, a longtime data center executive who co-founded Primary Digital Infrastructure in 2024.

The market is still generating demand for new development, and it has the best fundamentals for existing assets. Northern Virginia had a 0.5% data center vacancy rate at the end of last year after absorbing more than 1 gigawatt of capacity in 2025, and its rental rates are higher than every other data center market, according to CBRE.

"Capital is comfortable with that location," CBRE Vice Chairman Rob Faktorow, a top data center investment sales broker, said Tuesday at Bisnow's national Data Center Investment Conference and Expo event.

Sheputis, speaking onstage at the Bethesda North Marriott Hotel & Conference Center, was part of the team that put together the deal for OpenAI and Oracle's massive Stargate AI data center campus in Abilene, Texas, a project that itself made that town one of the country's largest data center markets.

The Manhattan-sized data center developments driving the AI boom require power capacity and land that Northern Virginia doesn't have. They are gravitating toward remote areas that don't have the type of organized opposition to data centers that has emerged in the industry's hubs.

But big AI data center campuses have had a hard time finding investors to buy them after completion, and they aren't the only data centers being built.

With things like smartphone usage, video calls and television streaming, Americans still generate a tremendous amount of demand for the type of cloud computing that has filled Northern Virginia with server racks. And that computing requires data centers with proximity to population centers and fiber networks.

"Northern Virginia will continue to grow and be an important part of cloud growth," Prologis Global Head of Data Centers Chris Curtis said. "Everybody's talking AI, but the growth of the cloud, the fabric of our lives, is still there."

GI Partners last year completed a 24-megawatt data center in Ashburn leased to DataBank. That is small relative to the AI campuses being built, but it would have been considered a sizable project last decade, and Managing Director Michael Lee said it shows activity is still happening in Northern Virginia.

"When they say, 'Ashburn is dead, it’s not moving,' it is still moving. Don't believe the hype," he said.

Lee said the market still draws cloud computing demand that can spur new development, and it is especially appealing to investors looking to buy data center assets.

"Ashburn is where you want to be, make no doubt about it," he said. "There are transactions happening now because they’re 100% occupied, so people have to sell their assets. And when they sell their assets, someone’s going to buy them."