Virginia's 2025: Tech Dominance Attracts Billions, Threatened by Imprudent Policies

When states get the fundamentals right - regulatory streamlining, business-friendly labor policies, and strategic infrastructure investment - the results can be extraordinary. Virginia's 2025 stands as a testament to this principle. The Commonwealth attracted nearly $50 billion in announced corporate investments, positioning Virginia as a global leader in artificial intelligence, data infrastructure, and advanced manufacturing. 

Yet even as Virginia triumphs in economic development, lawmakers are considering policies that could undermine this success. Looking back at 2025, it's clear that Virginia stands at a crossroads between its pro-business achievements and a potentially more restrictive future.

The Wins: Virginia's Extraordinary Economic Development Success

Virginia's 2025 was remarkable for the sheer scale and quality of corporate investment announcements. These wins didn't happen by accident; they reflect years of strategic economic development, deregulation, and a commitment to the fundamentals that attract capital.

Amazon's Historic $35 Billion Investment and $700 Million Land Purchase

Amazon Web Services announced in 2025 a massive expansion of its Virginia data center footprint, committing to invest $35 billion by 2040 in new data centers across multiple Virginia locations. In August 2025, Amazon paid $700 million for nearly 188 acres in Prince William County, representing one of the largest data center land transactions in Virginia history.

Amazon's multibillion-dollar Virginia investments demonstrate the Commonwealth's commitment to innovation, critical infrastructure, jobs, and an overall business-friendly environment. Virginia's "Data Center Alley" in Northern Virginia houses 13% of global data center capacity, positioning the Commonwealth as a critical business hub for emerging technology. The $50 billion government AI investment strengthens Virginia's role in supporting federal operations while creating thousands of construction and operational jobs.

This is what happens when states compete successfully for transformational investment: entire ecosystems develop around these anchor companies, creating spillover benefits for local communities and supply chain partners.

LS Cable's Record $1.37 Billion Manufacturing Commitment

South Korean manufacturing giant LS Cable & System announced in December 2025 a historic $689 million investment in Chesapeake, Virginia, marking the single largest capital investment in Hampton Roads history. Combined with LS Cable's earlier $681 million submarine cable manufacturing facility that broke ground in April 2025, the company's total Virginia investment reaches approximately $1.37 billion and will create 760 total jobs.

LS Cable's decision to invest nearly $1.4 billion demonstrates Virginia's ability to attract and retain key business investments in critical infrastructure and manufacturing. The establishment of domestic rare earth magnet production addresses critical vulnerabilities in U.S. supply chains, making Virginia an indispensable location for strategic industries.

Vantage Data Centers' $2 Billion Stafford County Campus

Vantage Data Centers announced in November 2025 a $2 billion investment to construct a new data center campus in Stafford County, expanding Virginia's dominance in data infrastructure and artificial intelligence. The project will create 1,100 construction jobs and 50 permanent positions.

This investment brings Vantage's statewide capacity to 782 megawatts with a combined Virginia investment of approximately $8 billion across four campuses. Virginia's leadership in data infrastructure positions the Commonwealth at the forefront of artificial intelligence development and digital transformation. Stafford County's emergence as a data center hub demonstrates how Virginia's economic development extends beyond the Northern Virginia corridor. The state is becoming a globally business-friendly location for emerging technology industries.

Eaton's $50 Million Henrico County Manufacturing Expansion

Intelligent power management company Eaton announced in December 2025 that it will invest over $50 million to expand its manufacturing operations in Henrico County, creating 200 new jobs. The expansion reflects surging demand for critical power equipment driven by data center growth and artificial intelligence infrastructure.

Eaton will occupy a new 350,000-square-foot facility near Richmond International Airport, more than doubling the company's regional footprint. The facility will manufacture switches, power distribution units, and remote power panels essential for providing reliable, uninterrupted power to data centers.

The expansion will bring Eaton's Henrico workforce to nearly 500 employees, with hiring beginning in 2026 and production starting in 2027. This represents part of Eaton's $1.2 billion commitment to North American manufacturing since 2023, positioning the company to meet rapidly increasing power requirements for AI infrastructure.

Eaton's decision to expand rather than relocate demonstrates Virginia's success in retaining and growing existing business relationships. The expansion directly reflects Virginia's efforts to position itself as a global business hub for AI infrastructure and energy management. Manufacturing advanced power management equipment positions Virginia workers at the center of global technology business development.

Governor Youngkin's Deregulation and Economic Development Strategy

Governor Glenn Youngkin has championed comprehensive deregulation and business-friendly policies that generated approximately $1.4 billion in annual savings for businesses and residents by streamlining 35% of Virginia's regulations. This pro-business environment contributed to Virginia's ranking in the top 10 of Chief Executive magazine's 2025 Best States for Business for the first time since 2013.

Virginia's comprehensive approach to economic development – combining regulatory efficiency, workforce development, and infrastructure investment – creates a sustainable, resilient, and competitive business environment. The state's focus on business investments and geographic diversification ensures economic opportunity extends throughout the Commonwealth, not just in traditionally prosperous regions.

The Setbacks: Policy Headwinds That Threaten Virginia's Competitive Edge

Even as Virginia triumphs in attracting transformational investment, lawmakers are advancing policies that could undermine this success. These measures reveal a tension in Virginia politics between the business-friendly orientation that has driven recent economic wins and a more restrictive approach to regulation and labor markets.

Expanded Non-Compete Restrictions: Limiting Business Protections

Virginia expanded its non-compete agreement ban under HB 1766 and SB 1056, effective July 1, 2025. Previously, Virginia prohibited non-compete agreements only with employees earning below a specified salary threshold. The new law expands the prohibition to cover any employee entitled to overtime pay under federal law, regardless of income level.

This expansion makes it difficult for Virginia employers to protect legitimate business interests in trade secrets, client relationships, and confidential business information. The law may disadvantage Virginia businesses competing against out-of-state employers who can lawfully enforce non-compete agreements in their jurisdictions. Employers may need to rely more heavily on other restrictions to protect business interests, which may be subject to different enforceability standards and distract businesses from growing.

Non-compete agreements aren't about preventing workers from earning a living; they're about protecting legitimate business investments in training, relationships, and proprietary knowledge. Virginia's expansion of non-compete restrictions removes a valuable tool from employers' hands.

Reproductive and Sexual Health Data Privacy Protections: Compliance Chaos

Virginia enacted SB 754, signed by Governor Youngkin on March 24, 2025, and effective July 1, 2025, which restricts collection and use of reproductive or sexual health information. The law amends the Virginia Consumer Protection Act to prohibit suppliers from obtaining, disclosing, selling, or disseminating personally identifiable reproductive or sexual health information without explicit consumer consent.

The law's expansive definition of "reproductive or sexual health information” creates significant compliance uncertainty for companies. The absence of exceptions - which exist in other Virginia privacy laws - severely restricts beneficial business uses of health data for fraud prevention and service improvement. The law's excessively broad terms create substantial litigation risk for companies inadvertently handling reproductive health data.

While data privacy matters, poorly designed laws create compliance chaos without delivering meaningful protection. Virginia would have been better served by harmonizing with existing privacy frameworks rather than creating another patchwork requirement.

Minimum Wage Increase Proposal: Rising Labor Costs

HB 1 of 2026, introduced on November 17, 2025, would increase the hourly minimum wage to $15 per hour by January 1, 2028. The bill keeps the current minimum wage at $12.77 for 2026, then increases it to $13.75 on January 1, 2027, and to $15 on January 1, 2028. 

Here's the economic reality: increasing the hourly minimum wage disincentivizes employers from hiring new, unskilled entrants into the workforce. A $2 bump in pay for each hour across thousands of employees is significant, increasing the cost of doing business for many companies. Employment is one of the biggest expenses of any business. When employment costs rise, there's an increased risk of layoffs: bad for companies, Virginia's workforce, and the state's economy.

This is particularly problematic at a moment when Virginia is competing nationally for talent and investment. Raising labor costs sends the wrong signal.

The Incoming Spanberger Administration's "Affordable Virginia Agenda"

Incoming Governor Abigail Spanberger introduced her Affordable Virginia Agenda at the end of 2025, which would damage several industries in the name of building "a more affordable Virginia." The agenda would negatively affect Virginia's businesses, especially in certain industries.

Energy: The agenda would force the state's power companies to buy more energy storage capacity (large battery units) to lower peak prices. While this may address peak pricing, businesses and consumers would ultimately pay more overall throughout the year. Utility companies would have to recoup the cost of these new batteries by charging higher energy rates year-round.

Housing: As Republican House Leader Terry Kilgore noted, the housing proposals "largely focus on managing existing stock rather than increasing the supply of new homes. If you don't build enough houses, housing gets expensive." The agenda prioritizes price controls over addressing supply constraints—a fundamental misunderstanding of how markets work.

These proposals represent a troubling shift toward government intervention in markets and price controls—precisely the opposite of the regulatory streamlining and market-based approach that has made Virginia so successful in attracting investment.

What Virginia's 2025 Teaches Us

Virginia's 2025 is a story of tremendous economic wins shadowed by emerging policy headwinds. The Commonwealth's success in attracting billions from large tech companies like Amazon proves that strategic deregulation, business-friendly labor policies, and infrastructure investment work.

But the expansion of non-compete restrictions, confusing data privacy regulations, minimum wage increases, and the incoming administration's focus on market interventions suggest Virginia may be moving away from the approach that has driven its recent success.

The lesson is stark: states can't rest on past victories. Maintaining competitive advantage requires continuous commitment to the fundamentals: low taxes, streamlined regulations, business-friendly labor policies, and respect for markets.

Governor Youngkin's deregulation efforts and $1.4 billion in annual savings for businesses have been transformational. His right-to-work protections and investment in business-ready sites have made Virginia a destination for major corporate commitments. These wins are real and substantial.

As Virginia heads into 2026 and beyond, state leaders need to double down on the approach that has worked: regulatory streamlining, workforce development, infrastructure investment, and respect for markets. They should resist the temptation to intervene in healthcare, energy, and housing markets in ways that will ultimately increase costs and reduce economic dynamism.