July 2 (Reuters) – Blackstone’s QTS said on Thursday it had terminated its planned ‌Digital Gateway data center project in Virginia ‌and withdrawn the associated filings after years of planning ​and regulatory review.

The data center operator has faced years of local opposition and litigation over the project, despite it being approved by ‌the Prince William ⁠Board of County Supervisors.

Demand for AI and cloud computing has fueled a ⁠boom in data center construction across Virginia, home to the world’s largest concentration of such ​facilities.

However, the ​industry’s rapid expansion ​has drawn increasing ‌scrutiny from local communities and policymakers over its impact on electricity demand, land and water use, and the environment.

QTS said Virginia remains a major part of its business, citing investments ‌in Northern Virginia and ​the Richmond region, including $5 billion ​in Central ​Virginia.

The Digital Gateway project was expected ‌to bring tens of ​billions of ​dollars in capital investment, generate substantial annual local tax revenue and create thousands of ​long-term jobs ‌in Prince William County, according to the ​company.

(Reporting by Dharna Bafna in Bengaluru; ​Editing by Vijay Kishore)