Data Centers

While for many, mention of the Mountain State invokes only scenic views, rustic coal mines and a slower pace of life, West Virginia has been leaning into the fast-moving high-technology industry for decades with investments from top employers like the Federal Bureau of Investigations, National Energy Technology Laboratory, National Oceanic and Atmospheric Administration and U.S. Department of Defense.

Opportunities Arise

Demand has left the door to another high-technology sector wide open for West Virginia: data centers. In simple terms, a data center is a physical facility that houses computer systems, data storage and networking equipment. These elements are essential for IT infrastructure and the storing, processing and managing of large amounts of data.

The sizes of data centers range from modest to massive, including hyperscale data centers owned by large technology companies like Google, Meta and Microsoft. According to Josh Spence, chief information officer for West Virginia-based Alpha Innovations, hyperscale data centers are critical to powering large-scale artificial intelligence (AI) models, training algorithms and managing vast volumes of data in the cloud, providing the centralized computing power required for deep learning, analytics and enterprise-wide platforms.

However, as AI shifts from centralized systems to real-world applications, smaller facilities known as edge data centers are becoming just as essential.

“These smaller, distributed facilities are located closer to where data is generated, such as in hospitals, factories or vehicles,” Spence says. “They are designed to process data locally, which significantly reduces latency, or the time it takes for data to travel and return with a response. Reducing latency is crucial for time-sensitive operations.”

A few examples of real-time use include AI-assisted surgeries, precision robotics in manufacturing and autonomous logistics, which all rely on fast, local data processing.

“In these scenarios, milliseconds matter,” Spence says.

According to Sarah Biller, co-founder of Vantage Ventures, West Virginia cannot miss the opportunity to lead through this major market transition and realize the impact of a global economy in upheaval as the world tries to figure out how to manage the ways AI is altering how we live, work and make decisions across industries.

“There is opportunity in every crisis,” Biller says.

Why West Virginia?

According to the West Virginia Department of Economic Development (WVDED), data centers are a rapid-growth sector of the U.S. economy that play a vital role in national security and global competitiveness. Still, their development faces many challenges, including high energy demands, grid connection delays, access to skilled labor and access to reliable water resources.

The Mountain State offers solutions to many of these issues. As one of the most strategic and resource-rich locations in the country, West Virginia offers a prime location with its proximity to Washington, D.C., and various major federal institutions as well as being within a day’s drive of half of the U.S. population. The state also offers abundant and affordable energy as a top producer of both coal and natural gas; a world-class workforce that boasts a low turnover rate; more than 32,000 miles of rivers and streams; and a pro-business climate.

State leadership is also committed to digital infrastructure development in the form of microgrids: localized energy systems that can operate independently from or in conjunction with a main power grid. Microgrids provide autonomy as well as more resilience and sustainability for data centers, allowing for greater control over energy usage and potentially lower costs. West Virginia has promised to provide practical, pro-business solutions for responsible data center growth, including no caps on microgrids or their energy generation, allowing excess microgrid electricity to be sold on the wholesale market and a full review of the tax code to remain competitive.

Proactive and Policy-Driven

While the specifics are still under wraps, West Virginia currently has 55 active data center projects.

“We’re going to run out of power and sites before we run out of projects,” says Mike Graney, former executive director of the WVDED.

Companies are showing enthusiasm for housing their data in West Virginia due, in part, to specific legislation passed during the 2025 session.

House Bill 2014, also known as the Power Generation and Consumption Act, established the Certified Microgrid Program and the High Impact Data Center Program, removingmany common regulatory barriers for microgrids and including many perks such as the ability to sell surplus energy.

“The microgrid legislation is another enhancement to our offering for what those data centers might be able to take advantage of when they come to our state,” Graney says. “We have tools that make us a better place to locate than other states, including a sales tax exemption on the construction of a building that would house a data center and a salvage valuation on the personal property that would be in that data center. So, think of all the servers and racks that would be placed there. They have a 5% salvage value, and those things need to be replaced every three to four years. That salvage valuation continues to go forward for a long time.”

Data centers require robust security to protect against cyber threats and physical access. This need for security is another reason the microgrid legislation is so beneficial.

“Data centers control a lot of sensitive data,” says Deputy Secretary of Commerce Nicholas Preservati. “They want their own power and backup power so no one can get in their system because it’s a closed grid, and it’s much harder for anyone to come in and interfere. Some of these data centers have their own models, and their investors won’t invest if they diverge from that model.”

According to West Virginia Secretary of Commerce Matt Herridge, Governor Patrick Morrisey’s administration is actively invested in bringing these types of technology companies to the Mountain State.

“One of the reasons I accepted this role was because I was so impressed with Governor Morrisey’s insight into why this direction was going to be important, and I wanted to be a part of a team that was going to bring these types of businesses here,” Herridge says. “I have been on the phone with the leadership from many of these businesses, and they are so excited to get to West Virginia. They see the potential with our workforce and energy opportunities. We have water, gas, oil and coal. With our proactive approach to microgrids, we are delivering flexible, sustainable power solutions that meet the demands of a rapidly growing sector, while creating long-term opportunities for innovation and investment.”

Overcoming Obstacles

As with anything new, the potential explosion of data centers across the Mountain State raises some concerns. According to Biller, some implications of the demand for data and computing power include infrastructure strain, geopolitical competition, economic shifts and workforce transformation.

“Data centers are multiplying rapidly, raising concerns about energy consumption, land use and sustainability,” she says.

Along with ensuring communities that data center projects will not diminish their quality of life, other obstacles include West Virginia’s ongoing battle to bring broadband to every corner of the state as well as meeting the educational needs of a new industry.

Alpha Innovations is already working in the edge infrastructure and computing space, helping organizations deploy and scale edge infrastructure. In helping to build and maintain edge data centers, Spence says connectivity remains one of the most important challenges.

“Reliable broadband is essential for enabling real-time data processing, supporting advanced technologies and attracting new digital infrastructure such as edge data centers,” he says. “While West Virginia has made meaningful progress in expanding broadband access, there is still work to be done. Gaps in connectivity can slow the deployment of modern infrastructure and limit the ability of communities and businesses to fully participate in a digital and AI-driven economy.”

The Alpha team currently designs edge solutions that can operate under current conditions while supporting long-term connectivity goals. According to Spence, with continued investment and collaboration, momentum can continue to build.

Being able to provide the appropriate level of cybersecurity is another requirement, and West Virginia’s colleges and universities have been working on increasing their cybersecurity offerings for several years now.

“The widespread adoption of AI is reshaping the Appalachian workforce and economy by creating new job opportunities, but it is also putting demands on our educational system to provide West Virginians with the skills they need to thrive in an AI-driven economy,” Biller says. “There’s growing demand for talent skilled in data science, cloud engineering and AI ethics, reshaping educational and training priorities.”

West Virginia has made additional strides to establish strategic partnerships and policies that will help overcome some of these obstacles, including the creation of the West Virginia POWER Tech Center, a tailored workforce pipeline for data and technology operations; Oak Ridge National Laboratory Partnership, a model to help plan and prepare for sustainable growth; Transmission Ready, a collaboration with Appalachian Power, FirstEnergy and Dominion; and Resilient West Virginia, a commitment to build an educated, resilient workforce to meet the needs of the evolving, AI-powered U.S. economy in advanced manufacturing, cybersecurity and data analytics.

“West Virginia’s strengths lie in its ability to unify the public, private and academic sectors in support of opportunities to expand and diversify the state’s economy,” Biller says.