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project in Virginia and withdrawn the associated filings after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.