Compass Datacenters is pulling out of a yearslong effort to build a key part of a 2,100-acre data center corridor in Northern Virginia after the development faced intense pushback from local residents.

The Brookfield Asset Management-backed data center company has spent years trying to secure Prince William County's blessings to develop more than 800 acres as part of the project. After sinking tens of millions of dollars into the effort, the firm decided that public opposition and state lawmakers' growing resistance to providing tax breaks created too many roadblocks, according to people familiar with the matter, who asked not to be named discussing non-public information.

The company's pivot is the latest reminder of how the tide is turning against data centers, complicating the ambitions of the developers and investors that bankroll them.

"Compass has reached the unfortunate conclusion that we cannot move forward," President AJ Byers said in a statement to Bloomberg. "While we still believe this project offered significant benefits for the region and our neighbors, recent legal actions and compounding regulatory hurdles have effectively closed a viable path forward."

Compass' project, along with plans by Blackstone Inc.-backed QTS to develop another more than 800 acres of adjacent land, would have created one of the largest global data center hubs and reinforced Northern Virginia's status as the data center capital of the world. Both companies rode the artificial intelligence boom and grew rapidly on the back of surging demand for the power and properties to run computing processes.

Now, though, the industry is forced to spend ever-more money and time to convince towns, counties and politicians that the economic benefits are worth the costs. Public pushback to these mammoth structures and their enormous electricity needs are now forcing data center companies to confront the limits of growth.

With Compass' decision to pull back, attention will turn to whether Blackstone's QTS decides to proceed.

Prince William County's plans for a tech corridor known as the Digital Gateway was part of the movement of data centers further away from Loudoun County, Northern Virginia's original data center alley.

Almost immediately, the project faced pushback for its location -- parts of the 2,100-acre site were right next to a historic civil war battlefield. Soon, residents who wanted to sell their land that were criss-crossed by transmission lines were clashing with neighbors who didn't want industrial development that could hurt their home prices.

There was other fallout for advocates of the project. The chair of a key policymaking panel, the board of county supervisors, was unseated in 2023 by a political outsider who campaigned against data centers' unchecked growth.