What to know about data centers in Maryland

U.S. tech companies are in an arms race to dominate artificial intelligence. To do that, they must build more data centers to house and power the rapidly evolving technology.

Maryland’s usual economic engines — education, health care and the federal government — are under strain after Trump administration funding cuts. Democratic Gov. Wes Moore has been working to lure companies in the quantum computing, life sciences, aerospace and defense industries. That means welcoming the data centers that have become common in those sectors. More than 30 already are operating, and more are proposed.

Some communities are pushing back. Local governments are approving moratoriums as they attempt to better understand how data centers fit into their communities. At least one county in the state has banned them.

Here’s what we know about data centers.

What is a data center?

Data centers have been around in some capacity since the 1940s. Thanks to technological innovations and the rapid expansion of the World Wide Web, they have evolved from rooms with gigantic computers (like those in the movie “Hidden Figures”) into what we now refer to as data centers.

Photos and documents that are in “the cloud,” as well as your favorite streamed TV shows and movies, are stored in servers on racks upon racks in often charmless, imposing buildings known as hyperscale data centers.

Many of these facilities are located on sprawling campuses that can require as much electricity and water as a small town. They’re often owned and operated by corporations like Amazon, Google and Meta, although some are being built by commercial developers.

There are a few different types of data centers, which vary in size and purpose.

“Enterprise” data centers are more common than the larger, hyperscale variety. They’re owned and operated by a single business and often are located in that business’s network closet or server room.

“Colocated” data centers are larger and often leased by one or several businesses. These can be small-, medium- or large-scale centers.

The business owns the equipment, while the co-location provider leases the physical infrastructure, including the hardware, power, cooling, security and network systems.

Where are they in Maryland?

As of July 2026, there are an estimated 47 existing or planned hyperscale and colocated data center facilities in Maryland, according to US Data Center Map. Around 39 are operational; the other eight are under construction or in the planning phase.

There’s a project in Baltimore County on ice because of a data center moratorium, and another in Calvert County that Amazon scrapped this month. The Prince George’s and Montgomery county councils recently approved data center pauses of more than a year.

Harford County has completely banned them, becoming the first jurisdiction in the state to do so.

Maryland’s data center landscape is a mere fraction of “Data Center Alley” in Loudoun County in Northern Virginia. There are more than 250 operational data centers there — the largest concentration in the world. Another hundred are expected to be operational there in the coming years.

Most colocated data centers in Maryland are in Baltimore, according to data center tracking sites. But Frederick County is set to have the highest number of hyperscale data centers, with three completed buildings and four currently under construction.

Why do some political leaders want them here?

Part of the appeal — and the pitch — for data centers is their effects on taxes.

Quantum Frederick, a data center development in Frederick County, is estimated to generate $24.5 billion in tax revenue during the construction period, according to an economic impact analysis.

When Amazon held a community meeting in March to pitch its data center campus in Calvert County, the tech company said it would invest in community programs and local workforce development opportunities. But one of its largest benefits would be the property, business and personal property taxes it would pay to the county, company representatives said.

The revenue generated from these taxes can support capital improvements for roads, parks, schools and more.

What’s the counter-argument?

Tax generation isn’t always straightforward. Governments have been known to grant exemptions from sales taxes as a trade-off for added property taxes.

Virginia, which has hundreds of data centers statewide, has experienced an estimated nearly $2 billion in losses last fiscal year from sales and use tax exemptions, according to Good Jobs First, an economic development watchdog.

Then there are home prices. Although some people don’t want to live near a data center, others do.

A 2025 study from George Mason University found that there is no evidence that proximity to data centers negatively impacted home values in Northern Virginia.

It’s too soon to tell if that will be the case in Maryland.

Do they make my electric bills go up?

Yes, data centers are increasing your electric bills.

Data centers need a lot of power — as much as a small town in some cases. With so many popping up along the East Coast and mid-Atlantic, that growing demand has put pressure on the region’s power grid and local transmission lines, which is how electricity is carried from power plants to substations and then to homes and businesses.

The entire system needs to be upgraded, which comes at a cost paid by ratepayers across PJM Interconnection’s service territory. PJM is the power grid operator for 13 states, including Maryland, as well as Washington, D.C.

PJM Interconnection estimates that Maryland ratepayers will pay about $4.3 billion for electrical-load growth-related costs, which is the grid operator’s projection of future demand. They’ll likely pay another $2.8 billion for local transmission projects, according to the Maryland Office of People’s Counsel, the state’s ratepayer advocate.

More data center developers are putting these transmission line upgrades into their pitches to communities. Some volunteer to bring their own power plants; others say they’ll cover the cost of these upgrades.

TeraWulf, a bitcoin mining company, recently secured approval from federal regulators to purchase the Morgantown coal-fired power plant in Charles County for its planned data center complex.

What about their water use?

Data centers need a lot of water for their cooling systems. The processing chips in data centers, similar to those in phones and laptops, get very hot and water is used to cool them. Most of that comes from local drinking water supplies.

A single-family home in Baltimore County uses around 82 gallons of water per day, according to a recent data center study report for Baltimore County. A data center in Northern Virginia uses around 18,000 gallons of water per day, the study said. That’s the equivalent daily usage of nearly 200 homes in the county.

Proponents of data centers, like the Maryland Tech Council, which created the Data Center Alliance of Maryland, point out that some golf courses use nearly as much water as a data center.

The cooling technology inside data centers is improving, and some systems can use recycled wastewater instead of drinking water.

Are there any health issues for people living near them?

Data centers take years to construct. And it’s a very noisy process, filling the air with rumbling, beeping, thumping and drilling.

Once built, people in communities around data centers have reported a constant humming sound. Most aren’t loud enough to cause hearing loss, but the noise can still affect mental and physical health and sleep and diminish the quality of residents’ lives.

Some of that noise also comes from the backup diesel generators that kick on when the power grid can’t provide 100% of the data center’s energy needs. Each building can have a dozen or more generators.

The generators don’t run frequently, researchers at Virginia Commonwealth University found, but “some facilities are already releasing 30% or more of their permitted emissions.” Still, there is concern about the environmental and health impacts from the greenhouse gases and fine particulate matter created from these emissions.

In 2024, Aligned Data Centers said it was ending its plan to build a 3.3 million square-foot data center campus in Frederick County after the Maryland Public Service Commission rejected the company’s request to install 168 generators.

Diesel generators are vital for data centers. In Maryland, they’ve traditionally been reserved for hospitals and health care facilities. State legislators expanded the law in 2024 to include data centers. Aligned Data Centers’ project has been moving forward ever since.

Do data centers create jobs?

Yes, kind of.

Data center construction requires thousands of trade workers. These jobs pay well and provide consistent work for local tradespeople over many years.

But there’s a nationwide shortage of around 439,000 of these workers, and that means out-of-state construction workers may have to fill the gaps on local data center projects.

In some other places, out-of-state workers have packed trailer and RV parks. Rent prices have increased because of demand. But small businesses and landlords have benefited.

Some data center critics say the jobs are temporary. Construction workers argue that their work is inherently short-term.

Once the construction is over, data centers don’t need nearly as many workers to maintain them. About 100 to 200 permanent jobs are created to support data centers once they’re operational.