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byline: Courtney Mabeus-Brown

Mind the gap

Margaret Abrams was studying engineering at Liberty University when she came across an online job advertisement from Newport News-based Huntington Ingalls Industries.

HII, Virginia’s largest industrial employer, was offering a $2,500 signing bonus to job candidates who successfully completed a 16-week computer numerical control training at the Navy’s Advanced Training in Defense Manufacturing pilot program, managed by the Institute for Advanced Learning and Research in Danville.

After three semesters at Liberty, Abrams wasn’t satisfied with school and was eager to get to work. Working with her hands was appealing to her, and she knew she wanted a career, not just a job.

Now, Abrams, 21, has found that. After graduating in June from the ATDM program, she immediately went to work for HII’s Newport News Shipbuilding division.

“We are directly working on parts for a ship,” she says. “You can look out in the dry docks and go, ‘Oh, that’s what I’m working on,’ kind of having that constant reminder.”

Abrams, who hails from Portsmouth, is one of more than 800 people who have graduated from ATDM since the program, a public-private partnership between IALR, Danville Community College, the Navy, the Department of Defense and industry stakeholders, began in 2021.

About 170 of those graduates have stayed in Virginia, according to Jason Wells, IALR’s executive vice president for manufacturing advancement.

“We continue each year to scale-up and to ramp up, and it’s been a tremendous lift,” Wells says.

That scale-up is coming at a crucial time in Virginia. Employees like Abrams are helping fill huge gaps in maritime manufacturing jobs, which includes Navy shipbuilding and repair as well as the state’s nascent offshore wind industry.

Hampton Roads Workforce Council President and CEO Shawn Avery projects 40,000 skilled workers will be needed regionally during the next six years to support the needs of the maritime and offshore wind industries, the skills for which, including welding, CNC machining and pipefitting, overlap by about 90%. The council is helping to lead recruitment and training efforts to meet the pressing regional workforce needs.

“We’ve got to put a really big, concerted effort on filling those jobs and developing that pipeline,” Avery says.

And work is already underway to meet that demand.

Fixing a hole

The Navy says more than 100,000 skilled workers are needed in the next decade to build the nation’s newest attack and ballistic submarines, including Virginia- and Columbia-class boats. Newport News Shipbuilding, which has a construction sharing agreement with General Dynamics’ Connecticut-based Electric Boat subsidiary, is tasked with building two Virginia-class boats annually and making six modular components for each Columbia-class submarine.

That 100,000-worker tally counts the service’s submarine industrial base, which includes 15,000 suppliers. The Navy says an estimated 40,000 more workers will be needed at the Navy’s four public shipyards to sustain those submarines. Those figures do not include the workers who will be needed to build other ships, including the aircraft carriers USS John F. Kennedy and USS Enterprise at Newport News Shipbuilding, or overhaul other vessels across its fleet.

Meanwhile, Dominion Energy’s $9.8 billion, 2.6-megawatt Coastal Virginia Offshore Wind project began taking shape in May with the installation of foundations on the ocean floor to support 78 of the offshore wind farm’s 176 electricity-generating turbines, says John Larson, the Fortune 500 utility’s director of public policy and economic development.

A September 2020 report prepared by the Hampton Roads Alliance projected that the CVOW project would require 900 direct and indirect jobs during construction through 2026 and 1,100 indirect and direct jobs annually thereafter. More recently, in mid-August, a Dominion subsidiary won rights to lease more than 176,000 acres adjacent to the CVOW project, which could add up to 4 gigawatts of offshore wind power.

At least 14 companies affiliated with the offshore wind industry, including suppliers, have either moved to or expanded in the region, Larson says. One of those companies, LS GreenLink USA, announced in July that it would build a $681 million, 750,000-square-foot manufacturing plant in Chesapeake to produce high-voltage, direct-current subsea cables for offshore wind farms like CVOW. The project is expected to create more than 330 jobs.

Investments like Dominion’s and LS GreenLink’s show that the region’s efforts to promote itself as an offshore wind hub are coming to fruition, and supporting that growth will be critical, says Matt Smith, director of energy and emerging technology for the Hampton Roads Alliance, a regional economic development organization. “Ultimately,” Smith says, “we want to have kind of an ecosystem here that can … support the [offshore wind] industry on the East Coast.”

In November 2023, the workforce council received a $14 million U.S. Department of Defense grant to boost regional workforce training for the defense industrial base. That’s on top of a $11 million grant in 2022 from the U.S. Economic Development Administration to develop a maritime talent pipeline, known as the Regional Maritime Training System, or RMTS.

Reaching a 100-mile radius around Hampton Roads, the RMTS initiative includes partnerships with 30 schools, colleges and training programs to train future maritime workers in a variety of necessary skills, and it currently works directly with 18 companies that collectively make up 80% of the region’s jobs in ship-building and repair. Those numbers will continue to grow as RMTS adds partners, Avery says.

As of August, more than 1,000 people have enrolled in maritime training programs through RMTS. At least 458 RMTS graduates are now employed in maritime jobs with an average wage of $22.15 an hour, according to the workforce council.

But there’s still work to be done. According to council data, the demand for crucial industry roles, like welders, electricians, and pipefitters, to name a few, currently outstrips area supply. As an example, the region has the capacity to train 1,067 pipefitters in 2025, but with an estimated regional demand for 1,268 welders next year, there’s already a forecast deficit of 201 people to meet that need. For shipfitters, the situation is even more bleak, with a training capacity of 202 but a demand for
951 workers, for a deficit of 749 shipfitters.

In May, the workforce council launched a $2.5 million marketing campaign around RMTS, including traditional and digital advertising and a website, maritimejobsva.com, which has had more than 64,000 visitors to date. The campaign will run through December, after which the workforce council will reassess its efforts, says Avery, who notes the campaign has led to about 250 people entering a training pipeline so far.

Students in the Navy’s Advanced Training and Defense Manufacturing program in Danville learn how to use dyes to inspect parts for imperfections. Photo courtesy Accelerated Training in Defense Manufacturing

Schoolhouse support

Looking to the future, efforts are also expanding within area schools, expanding the GO TEC, or Great Opportunities in Technology and Engineering Careers, program to seven new Hampton Roads school systems this fall after already spreading to Hampton and Newport News. Begun in Danville and Pittsylvania County in 2018, the state-funded program introduces middle schoolers to careers in manufacturing and skills like welding and machining.

Additionally, in September, an expanded Maritime Welding Training Lab opened at Virginia Beach City Public Schools’ Technical and Career Education Center, doubling its training capacity to 80 students. The Navy-funded $2 million expansion came with the stipulation that Virginia Beach schools coordinate with the workforce council and RMTS, Avery says.

And in October, about 3,000 eighth graders from Chesapeake attended an annual Worlds of Work career expo, which this year was focused on the shipbuilding industry, Avery says. “It’s not just your old-fashioned … kind of jobs,” he says. “These are really pretty, pretty unique jobs you can get in the industry now.”

Paul D. Camp Community College, which is also building a new workforce and innovation facility in Suffolk that will feature maritime manufacturing skills training, has partnered with Newport News Shipbuilding on the Isle Maritime Trades Academy. Scheduled to open in fall 2025, the state-funded lab school will offer industry credentials in marine welding and marine electrical for area high schoolers.

And while Newport News Shipbuilding is a partner in RMTS, it also has its own ongoing efforts to build a pipeline of new workers. Xavier Beale, the shipyard’s vice president of human resources and trades administration, says the company is meeting a goal announced in March to hire 3,000 tradespeople this year. That’s out of a total 19,000 skilled trades workers the shipyard anticipates hiring during the next decade.

Beale uses the word “intentionality” to describe the shipyard’s recruitment efforts. Newport News Shipbuilding has expanded its reach along the U.S. Route 58 corridor, which stretches through Southern Virginia, to grow its footprint there, and has also expanded its outreach into Ohio, Pennsylvania and West Virginia.

“When I say intentionality,” Beale says, “we embarked upon a data-driven strategy to really identify where there are experienced craft persons … [who] may not be in the maritime space but [have] the technical proficiency to come and add to the work that we’re doing here for the nation.”

About a mile from Newport News Shipbuilding, Virginia Peninsula Community College is building a 16,000-square-foot facility in Newport News to add new training options, including classes in welding and marine electrical skills. Though VPCC already offers training in those areas in other parts of the region, it will also provide training in structural fitting at the Newport News facility, boosting its ability to train about 380 students annually in maritime- specific work, says Todd Estes, VPCC’s vice president of workforce development and innovation. Funded by a $2 million local grant from Newport News, which also donated land for the new building, and a $3.5 million federal grant, Estes expects the facility to be training students by summer 2025.

Tidewater Community College, which opened its skilled training center in Portsmouth in 2018, offering accelerated training in marine coating, welding, pipe-fitting and sheet metal, is also planning expansions, says Laura Hanson, TCC’s associate vice president of workforce solutions. The college is in the process of renovating space in Virginia Beach where it will add focus on training for offshore wind jobs. TCC is also looking to expand its marine trades training to Norfolk, Hanson says.

Since opening its maritime training program six years ago, TCC has trained 1,935 students, and it has expanded its training capacity from 10 welding booths to 25, reaching that total in the last year, Hanson  says. Its original focus was on pre-hire programming, offering fast-track training for people hired for specific jobs — classes run from 80 hours to 200 hours — but in more recent years, TCC added open enrollment options to meet more demand.

About 200 miles away, in Danville, IALR has also been growing toward its goal of educating 800 to 1,000 students annually for the Navy’s Advanced Training in Defense Manufacturing program, Wells says. Early next year, the program is expected to move into a new, 100,000-square-foot National Training Center (formerly known as the Regional Training Center), built with $58 million in Navy funding.

The Navy’s Advanced Training in Defense Manufacturing program at IALR has grown from about 10 instructors in spring 2023 to a combined 40 instructors and technicians, with a support staff of more than 70 employees, Wells says, and it’s continuing to hire as it plans to move into its new space.

An attractive workforce

Though its operations aren’t expected to begin until the third quarter of 2027, LS GreenLink USA is making long-lead preparations to hire, says Patrick Shim, managing director of the U.S. subsidiary of South Korean parent company LS Cable & System. As many as 250 of LS GreenLink’s projected 330-plus jobs in Chesapeake will be in production, building massive cables that can be “tens of miles” long, Shim explains.

A major factor in the company’s decision to locate in Hampton Roads is the region’s pool of skilled military veterans. About 12,000 to 15,000 service members in the region separate from active duty annually, and their background and skills make them an in-demand talent pool. LS GreenLink is certified through the state’s Virginia Values Veterans program, which helps recruit veterans for civilian jobs, and is also working with the Virginia Economic Development Partnership’s Virginia Talent Accelerator Program, which will help with recruiting and training employees. The VEDP accelerator program, a state incentive offered at no cost to eligible companies expanding or locating in Virginia, has already set up a website that allows LS GreenLink to connect with interested job applicants.

The company has also made the rounds with area trade and high schools, as well as Tidewater Community College.

Says Shim: “We kind of covered pretty much every type of schools out there that can kind of feed us employees.” 

Amazon, Dominion agree to explore nuclear development

With power consumption by data centers and AI projected to more than quadruple in Virginia in the next 15 years, Amazon.com and Dominion Energy Virginia have entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Station in Louisa County, the two companies announced during an Oct. 16 event at Amazon’s HQ2 East Coast headquarters in Arlington County.

Dominion and Amazon’s memorandum of understanding means the companies will “jointly explore innovative ways to advance SMR development and financing while also mitigating potential cost and development risks for customers and capital providers,” according to Dominion’s announcement.

Gov. Glenn Youngkin, U.S. Sens. Tim Kaine and Mark Warner and Dominion Energy Virginia President Ed Baine were at the event, among other state and national dignitaries.

“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, while helping us progress toward our Climate Pledge commitment to be net-zero carbon across our operation by 2040,” Amazon Web Services CEO Matt Garman said in a statement.

Only two SMRs are in operation worldwide — one in Russia and the other in China — and Virginia likely won’t have its own SMR before the mid-2030s.

Over the past couple of years, SMRs have been a big part of Virginia’s energy conversation, especially as data center growth has put more demands on the state’s power grid. In a May earnings call, Dominion Energy CEO Bob Blue said that the utility is receiving more requests to power larger data center campuses with increased energy demands of 60 to 90 megawatts per building, or several gigawatts for multibuilding campuses.

“There are a number of things that are driving energy demand within Virginia,” Baine says. “Data centers [are] absolutely one of the big ones, but there’s also manufacturer electrification that is also increasing demand.”

Dominion announced in July that it had issued a request for proposals to evaluate the feasibility for a small nuclear reactor to be developed at its North Anna power plant, where it has two conventional, large nuclear reactors.

In October’s agreement, Amazon has agreed to explore the development of an SMR project near North Anna, bringing “at least 300 megawatts of power to the Virginia region, where Dominion projects that power demands will increase by 85% over the next 15 years.”  

Energy storage projects slated for Greensville, Pittsylvania

Two energy storage projects proposed for Southern Virginia would help augment the area’s power capacity, diversify the region’s tax base and boost the regional economy, industry representatives say.

Dominion Energy Virginia wants to build a liquified natural gas storage facility on more than 20 acres that the Richmond-based Fortune 500 utility owns next to its Greensville County natural gas power plant, straddling the line with Brunswick County, according to a June filing with the Virginia State Corporation Commission. The $548 million facility, which would open in late 2027, would employ 400 construction-related workers and culminate in six full-time jobs, bringing $17.5 million to the local economy, and boosting combined county tax revenues by $35.5 million over 25 years, according to Dominion.

The storage facility would provide backup fuel supply for Dominion’s Greensville and Brunswick power stations during periods of extreme weather or peak demand, enough to power 700,000 homes in the region for up to four days, says Dominion spokesperson Jeremy Slayton. He points to Winter Storm Elliot, which in December 2022 knocked out power for millions of electricity customers along the Eastern Seaboard, as well an early 2021 deep freeze in Texas that led to hundreds of deaths and billions of dollars in economic losses.

“We see those types of incidents happening, and we know that we can’t allow that to happen for our customers,” Slayton says.

Separately, in July, North Carolina-based Strata Clean Energy received approval from the Danville-Pittsylvania Regional Industrial Authority to lease 85 acres at the 3,528-acre Southern Virginia Megasite at Berry Hill to build a lithium-ion battery storage facility on an up-to-4-acre pad that would connect to an Appalachian Power substation.

Strata Director of Development Adam Thompson says the project, which would employ only a handful of workers, is in a “holding pattern” while economic development officials work to attract other customers to Berry Hill, but construction could start in 2026.

Although both projects won’t create many permanent jobs, those positions will likely be well-paying for the region, says Bryan David, program director for the University of Virginia’s Weldon Cooper Center for Public Service. Localities in Southern Virginia are working “as hard as [they] can to transform the economy” by diversifying their tax bases, he says, and “these types of investments are incrementally one more step toward that goal.”  

As data centers grow, Amazon and Dominion explore small nuclear reactors

With power consumption by data centers and AI projected to more than quadruple in Virginia in the next 15 years, Amazon.com and Dominion Energy Virginia have entered into an agreement to explore potential development of small modular nuclear reactors at North Anna Power Plant in Louisa County, the two companies announced at an event Wednesday at Amazon’s HQ2 East Coast headquarters in Arlington County.

Dominion and Amazon’s memorandum of understanding means the companies will “jointly explore innovative ways to advance SMR development and financing while also mitigating potential cost and development risks for customers and capital providers,” according to Dominion’s announcement.

“This is a milestone along the path,” Amazon Web Services CEO Matt Garman said at Wednesday’s event. “There’s a ton that we need to do between here and there, and there’s a lot of work that needs to go into this, but this is a really important milestone that we’re celebrating today.”

At Wednesday morning’s event, Gov. Glenn Youngkin, U.S. Sens. Tim Kaine and Mark Warner and Dominion Energy Virginia President Ed Baine were on hand, among other state and national dignitaries.

“I am thrilled that Virginia is among the first states to take this big step,” Youngkin said. “Just two-and-a-half years ago, Virginia was literally accelerating on what has been an uninterrupted renaissance in growth, job growth and investment by companies who’ve committed $83 billion to expand or come to Virginia, and hire more people than we’ve ever had working before in the history of the commonwealth.”

He noted that the state is “poised to take this giant step with our partners,” as home to the nuclear Navy, multiple research universities and Dominion.

In his comments, Kaine also mentioned Lynchburg-based nuclear fuel producer BWX Technologies and Framatome Inc., the North American subsidiary of the French nuclear equipment, services and fuel producer, as other significant players in Virginia’s nuclear energy sector. “Amazon is the largest power user in the United States,” Kaine said. “That AWS is here, and that AWS is endeavoring to help us advance our innovation together with these other innovators in Virginia makes perfect sense.”

As of now, only two SMRs are in operation — one in Russia and the other in China — and Virginia likely won’t have its own SMR before the mid-2030s.

Warner, who chairs the Senate’s Select Committee on Intelligence, said Wednesday that energy innovation is important also as a matter of national security, particularly as the U.S. races to catch up with China’s innovations. “National security is not simply the nation state that has the most tanks and guns and ships and planes, but increasingly, it’s going to be who can win the battle in technology competition.” China, he added, is constructing “30 nuclear plants even as we speak. They have a goal of adding 150 more by 2035.”

However, he said, Virginia is “the nuclear capital for the country,” with 100,000 people already working in the nuclear sector in the commonwealth, including sailors, university researchers and employees at BWXT, Framatome, Huntington Ingalls Industries and other companies.

Ambitious plans

Amazon’s agreement with Dominion was just part of its news Wednesday, as the global e-tail giant announced it has signed three agreements to support development of small modular reactors, or SMRs, including one in the state of Washington with Energy Northwest, to develop four advanced SMRs. According to Amazon’s announcement, the four reactors would generate roughly 960 megawatts of electricity at full operation, beginning in the early 2030s. Amazon, which in March acquired a nuclear-powered data center campus in Pennsylvania from Talen Energy, also has committed to invest in SMR developer X-energy, whose reactor design will be used in the Energy Northwest project.

“Nuclear is a safe source of carbon-free energy that can help power our operations and meet the growing demands of our customers, while helping us progress toward our Climate Pledge commitment to be net-zero carbon across our operation by 2040,” Garman said in a statement released Wednesday morning.

Dominion previously announced in July that it had issued a request for proposals to evaluate the feasibility for a small nuclear reactor to be developed at its North Anna power plant, where it has two conventional, large nuclear reactors. Nuclear technology companies received the RFP, which was not a guarantee to build an SMR but would be the first step in exploring whether such a step was feasible, the Fortune 500 utility said in July.

On Wednesday, Dominion Energy Virginia’s Baine said that the “site is well on its way to be able to be developed,” and that he expects Dominion to make a decision on the winning proposal before the end of the year. He also said that X-energy is among the companies that have submitted a proposal.

The RFP, Baine added, will “inform us how we want to move forward with companies for additional small modular reactors as well.”

Virginia Secretary of Commerce and Trade Caren Merrick said Wednesday that she expects Youngkin to soon issue an executive order about accelerating permitting for nuclear sites, and the state has invited X-energy to come to Virginia for manufacturing.

Competitor Google preempted Amazon’s announcement by a day, announcing on Tuesday that the tech company had reached an agreement with Kairos Power to develop and purchase 500 megawatts of power from six to seven SMRs, planned to come online between 2030 and 2035. And in September, Microsoft forged a deal with Constellation Energy to offset power consumption by its data centers by reviving a portion of the Three Mile Island power plant, the Pennsylvania facility that in 1979 experienced a partial nuclear meltdown, the worst nuclear disaster in U.S. history.

Moving toward nuclear in Va.

Over the past couple of years, SMRs have been a big part of Virginia’s energy conversation, especially as data center growth has put more demands on the state’s power grid.

According to Dominion’s Integrated Resource Plan, filed Tuesday with the Virginia State Corporation Commission and the North Carolina Utilities Commission, power demand in Dominion’s coverage area in Virginia and North Carolina is expected to grow 5.5% annually over the next decade and double by 2039. Dominion has previously predicted that the data center industry in the state will demand 13 gigawatts of electricity by 2038, nearly five times the 2.8 gigawatts it used in 2023.

In Virginia, Amazon has agreed to explore the development of an SMR project near North Anna, bringing “at least 300 megawatts of power to the Virginia region, where Dominion projects that power demands will increase by 85% over the next 15 years,” according to Amazon’s news release. Additionally, Amazon signed an agreement to place a new data center next to a nuclear facility in Pennsylvania, a carbon-free energy source to power the data center.

In Loudoun County’s Ashburn area, where more than 70% of the world’s internet traffic courses through a corridor known as Data Center Alley, Amazon Web Services is the biggest fish in a gigantic pool. From 2011 to 2021, AWS invested more than $51.9 billion in Virginia, including building data centers. In January 2023, the company had at least 65 data centers in Loudoun in operation or under development, out of more than 200 data centers in the county, and AWS announced it planned to invest $35 billion by 2040 to build more data center campuses across the state.

Nationally, it’s anticipated that data centers will account for 17% of energy usage nationwide by 2030, according to a Bloomberg Intelligence report. That’s up from 4% in 2022 and 6% in 2026, according to data and projections from the International Energy Agency.

U.S. Secretary of Energy Jennifer Granholm, speaking at Wednesday’s event, called Virginia “the go-to place for the concentration of data centers,” and noted that AWS is the latest company to do “BYOP,” or “bring your own power” for data centers. “And this is the important piece I mentioned, that the technology companies know that in order for these data centers to achieve great community buy-in, bringing their own power with them is an important piece of that, so the rates are not raised on everyday citizens.”

She added that the Department of Energy is announcing $900 million in funding “for those who want to deploy even more … small modular reactors,” referring to applications opening for a program to support the first commercial-use SMR in the United States.

In the past couple of years, as artificial intelligence usage and overall digital use has grown, so has demand on Virginia’s power supply. In a May earnings call, Dominion Energy CEO Bob Blue said that the utility is receiving more requests to power larger data center campuses with larger energy demands of 60 to 90 megawatts per building, or several gigawatts for multibuilding campuses.

Baine said in an interview Wednesday that “there are a number of things that are driving energy demand within Virginia. Data centers [are] absolutely one of the big ones, but there’s also manufacturer electrification that is also increasing demand.”

The Joint Legislative Audit and Review Commission (JLARC) is conducting a study on data centers as some state legislators are pushing for high-volume power users to cover infrastructure costs to keep the state’s power grid reliable. The Virginia General Assembly forwarded all data center-related bills to 2025’s session so lawmakers could take JLARC’s study — expected to be released in November — into consideration.

Freelance writer Courtney Mabeus-Brown and Virginia Business Editor Richard Foster contributed to this story.

A smart defense

In late 2020, the Air Force made headlines when it announced that an artificial intelligence co-pilot, named ARTUµ, helped command and control a U.S. military spy plane for the first time in history.

If the name, pronounced R-2, sounds familiar, it is. Think R2-D2, or “Artoo,” Luke Skywalker’s lovable droid and X-Wing copilot from the “Star Wars” franchise. Except this was not a galaxy far away, but Beale Air Force Base in California.

ARTUµ controlled sensors and tactical navigation of a U-2 Dragon Lady on a reconnaissance training mission out of Beale on Dec. 15, 2020. It was charged with searching for enemy missile launchers while the plane’s human pilot, known only by the call sign “Vudu,” searched for enemy aircraft during a simulated missile strike.

The tech, developed by McLean-based Fortune 500 contractor Booz Allen Hamilton and Air Force researchers, modified an open-source gaming algorithm and ran more than 1 million training simulations in a lab — a “digital Dagobah,” Will Roper, who then served as the service’s assistant secretary for acquisition technology and logistics, wrote in an editorial for Popular Mechanics. ARTUµ was mission-ready in just over a month.

“Failing to realize AI’s full potential will mean ceding decision advantage to our adversaries,” Roper said at the time. 

Fast-forward four years and AI’s technological advancements have continued, transforming lives and — controversially — livelihoods as it becomes more entrenched in the workplace. At the same time, the military has continued to cite how critical AI will remain in helping the U.S. outpace its adversaries. Even as the Pentagon faces ongoing tensions in the Middle East amid the conflict between Israel and Hamas, and in Europe with Russia’s ongoing war on Ukraine, military leaders are refocusing for the potential of a wide-ranging battle with China in the Pacific that would most likely unfold across sea, air, land, space and cyberspace.

Virginia’s defense contractors are at the cusp of that work, with a hand in some of the largest and most transformative AI projects on behalf of the military. Those range from warfighting tools like unmanned vehicles to generative AI software to perform mundane business support tasks like military personnel record searches. That’s work that could be game changing for the military at a time when budgets and manpower are tight and harnessing data could be key to maintaining the upper hand against an adversary.

“We try to focus on mission meets
innovation,” says Holly Levanto, who is overseeing delivery of AI and digital solutions for Booz Allen Hamilton’s defense clients. Photo by Shannon Ayres

“I think that the eye is on the prize … when it comes to [the Department of Defense] right now, from the perspective of this is something we have to do from a national security point of view based on threats that we see from other nation states,” says Jason Payne, chief technology officer for Arlington County-based Microsoft Federal, which currently has a contract worth as much as $21.9 billion to produce more than 100,000 AI-enhanced goggles for the Army. “We know that near-peer competitors are investing heavily in this technology.”

Crunching data

The Pentagon is also investing heavily in AI technology. Its fiscal 2025 budget request, which totals $850 billion and was released in March, includes $1.8 billion for AI spending as well as an additional $1.4 billion for the department’s Combined Joint All-Domain Command and Control project, an ambitious departmentwide effort to connect “sensors to shooters to targets” globally.

But those dollar figures, the Pentagon admits, don’t likely tell the full story. With AI involved in so many programs, the Pentagon’s comptroller has acknowledged it’s difficult to provide a detailed breakdown of its AI investments. Even pinning down the exact number of AI defense projects is challenging. A 2022 Government Accountability Office report found that the DOD had at least 685 ongoing AI projects spanning the military service — a figure based on procurement and research and development dollars.

While those numbers may not offer a ton of clarity on the scope to which the Pentagon is looking toward AI, they do underscore the importance of it for the military, and Virginia contractors are benefiting from that desire.

Booz Allen Hamilton bills itself as the largest supplier of AI services to the federal government, with more than 300 active projects involving AI, according to Holly Levanto, a vice president overseeing the delivery of AI and digital solutions for Booz Allen’s U.S. defense clients.

“We try to focus on mission meets innovation,” Levanto says.

That work has included some of the Pentagon’s largest AI projects to date, including an $800 million, five-year task order awarded in 2020 to integrate and develop AI for the warfighter in the Alliant 2 Joint Warfighter Task Order, as well as a $885 million, five-year task order awarded in 2018 to help the DOD sift through its enormous amount of reconnaissance data — a project called Enterprise Machine Learning Analytics and Persistent Services, or eMAPS — through the deployment of AI and neural and deep neural networks. Booz Allen won a $1.5 billion recompete for the project in 2022.

Focusing on those mission areas has meant incorporating AI in ways to parse data faster. As an example, the Navy gathers vast amounts of data from its ships, Levanto says. Booz Allen has turned raw naval message traffic into tabular data that can be more easily and quickly analyzed to pinpoint trends. 

“We can send AI models to the edge at the point of data collection,” says Levanto, a former naval surface warfare officer. “And so, we have some real-world scenarios where we’ve done that in points on the battlefield.”

Booz Allen also launched a venture capital fund in 2022 to sharpen its tech capabilities. It has now invested in 10 companies, eight of which are AI-focused, Levanto says. That included an investment in Wisconsin-based RAIC Labs, which developed a model- generating platform using unstructured data. In 2023, RAIC made headlines when its tech was used to track a Chinese intelligence balloon that traveled over the U.S. before being shot down by a military jet off the coast of South Carolina.

“Our ultimate goal is to get the Department of Defense to be able to utilize these leading commercial technologies … and so we need to help bridge that,” Levanto says.

Falls Church-based General Dynamics Information Technology, a subsidiary of Reston-based Fortune Global 500 aerospace and defense contractor General Dynamics, is also no stranger to big defense contracts involving AI, or those that involve wrangling large sets of data.

In March, GDIT received a $922 million contract to modernize enterprise IT infrastructure for U.S. Central Command, which directs and enables U.S. and allied military operations across the Middle East and a portion of Africa.

Data is the biggest barrier to AI, says GDIT’s Brandon Bean, the AI and machine learning leader for the company’s defense division. That includes data quality and integrity as well as accessing old, siloed IT architectures. Where it used to be that applications were built to create data as a byproduct, the paradigm has shifted. Now, data “is what the application is built to support,” Bean says. “The data comes first.”

At a September conference hosted by GDIT at Amazon’s HQ2 headquarters, John Hale, chief of cloud services for the Defense Information Systems Agency, discussed how DOD is working with contractors to update antiquated computer code with AI.

“We’re using AI capabilities to … modernize legacy code that all the people who ever wrote it are long gone,” Hale said. “And you know, it’s not perfect, but it gets us like 85 to 90% of the way there, and then we’re able to manually fill in that last 10 to 15% to bring these applications into the 21st century.”

For CENTCOM, GDIT is tasked with creating data analytical services to support decision-making across nearly 20 networks and building data centricity and literacy across the command. By leveraging AI, including incorporating data tagging, what has previously required a more tedious process of manual data sampling of mountains of records can be extrapolated much faster, giving commanders the potential to better evaluate what worked during missions, or develop trainings based on lessons learned. It could also help service members to prove justifications for injuries that may not have been recorded in their medical records, Bean says.

AI in the cockpit

While AI is helping the Defense Department wrangle large amounts of data for higher level decision-making, the Pentagon is also incorporating AI in weapons systems and for operational use by warfighters. And that tech is getting increasingly advanced.

In May, Air Force Secretary Frank Kendall, who has advocated for the military’s use of AI, rode in an F-16 Fighting Falcon that was controlled by AI in a dogfight exercise against another F-16 flown by a human. Relying on sensors, California-based Shield AI developed the program used by the Air Force during the flight. In March, Arlington County-based Boeing announced a collaboration with Shield AI to develop autonomous and AI technologies for defense programs. Boeing declined to comment for this story.

With AI in the cockpit, the technology shows no signs of slowing down, including in a variety of unmanned vehicles, which will be a key component in future battles, with several drone initiatives underway by the Pentagon and military branches.

At Newport News-based Huntington Ingalls Industries, Virginia’s largest industrial employer and the nation’s only builder of nuclear-powered aircraft carriers, computer vision and recognition technologies have improved to the point where autonomous undersea vehicles like the company’s REMUS platform can be used to hunt for targets, gather intelligence and respond to findings without having to report back to the surface, says Andrew Howard, senior director of unmanned surface vehicles and autonomy programs within HII’s Mission Technologies division.

“Based on … customer comfort with things, different use cases, they could either update its survey pattern based on that information, or they could use that as the cue to pass information back to a surface operator to … take action based on that,” Howard says. “So, it’s really kind of made the information a bit more actionable than it used to be.”

The Navy in December 2023 announced that it had successfully launched and recovered a REMUS “Yellow Moray” drone via torpedo tubes on the USS Delaware, a Virginia-class attack submarine commissioned in 2022 and built by HII in partnership with General Dynamics’ Connecticut-based Electric Boat subsidiary. The Navy has said it could field the program for its submarine fleet later this year.

Meanwhile, the Marine Corps has been testing similar surface-level technology for its Long-Range Unmanned Surface Vessel (LRUSV) program using technology developed by HII that uses cameras and machine learning to identify and classify targets for maritime domain awareness, Howard adds. The drone’s tech passes intelligence to an operations center for action. Based on that feedback, the drone can then update its mission and shadow an intended target if called upon to act.

Gathering intelligence with less risk to warfighters can help save lives. Making that information more readily available can make work easier, too.

Reston-based Fortune 1000 contractor CACI International offers the DarkBlue Intelligence Suite, a tool that incorporates various AI techniques, including computer vision and image processing, to help analysts in dark web investigations and tracking. The company received a $239 million six-year task order in August to provide intelligence analysis and operations, including the DarkBlue suite, to the Army’s Europe and Africa command.

AI is also helping the Marines step into the metaverse. In October 2023, Fairfax’s CGI Federal, the U.S.-based arm of the Canadian professional services and consultancy, announced that it successfully completed a $34 million pilot to digitally twin the Florida-based Marine Corps Platform Integration Center’s assets into a virtual world by tagging its inventory and helping the service track its assets in real time. Being able to keep up with equipment like tanks as they travel the world could be of huge importance in a distributed battle across the Pacific, where troops could set up on airfields constructed on austere island chains. It could also help the service track maintenance needs and predict trends across vehicle fleets, says CGI Vice President Stephanie Ackman, who leads the company’s technology practice for defense, space and intelligence clients. 

“When the rubber meets the road … [does a taxpayer] care about where the stuff is?” Ackman asks. “Yes, but they care more so about the safety of the individuals that are down range.”  

Dropping anchor

LS GreenLink USA spent two years on site selection, scouring much of the East Coast for the right location to build a 750,000-square-foot factory to manufacture subsea cables for offshore wind farms.

Then it landed on Chesapeake.

Patrick Shim, LS GreenLink’s managing director, cited several reasons for the company’s decision: access to the Port of Virginia, the approximately 15,000 veterans who enter the civilian workforce each year in the region, and the state, regional and local economic development support for companies like his.

“I’ve never seen anything like it in any other region out there,” Shim says.

In July, LS GreenLink, a U.S. subsidiary of South Korea’s LS Cable & System, announced it would build the United States’ first offshore wind subsea cable factory at the Deep Water Terminal Site in Chesapeake, creating an estimated 381 jobs and investing $681 million. 

The port has remained a large attraction for retailers and developers looking to invest in Hampton Roads. Industrial real estate had a 2.3% vacancy rate for the second quarter of 2023, which slipped to 3.6% for the second quarter of 2024, according to Cushman & Wakefield | Thalhimer. But that’s still well below the national rate of 6.6%, according to real estate company JLL.

A national slowdown in imports and rising interest rates are to blame for some of that increase, says Geoff Poston, senior vice president of Cushman & Wakefield | Thalhimer’s industrial group. But it’s not all doom and gloom.

Hampton Roads lagged behind other markets, like Savannah, Georgia, in spec building before the pandemic, but that’s changed in recent years, and more spec buildings are coming online. This contributes to the boost in the region’s vacancy rate, but Poston notes that Hampton Roads remains “in a much healthier position than most other industrial markets.”

That includes Savannah, which posted a 7.9% industrial vacancy rate for the second quarter of 2024.

“We’ve just got through an all-time record historical industrial market, and so this is a little more normal, although the developers, you know, they’d love to have more activity,” Poston says.

The port’s draw

The Port of Virginia’s shipping channel opened to two-way traffic for ultra-large container vessels in March, reducing turnaround time by 15%, according to the port. A central rail expansion that will allow it to handle an extra 455,000 20-foot-equivalent containers (TEUs) a year, bringing the total rail capacity to 1.8 million TEUs annually, was finished in early August.

The port processed 3.5 million TEUs in fiscal 2024, a 2% increase over 2023 and the second best year in its history.

Lang Williams, an executive vice president and principal with Colliers International Virginia and vice president of the Virginia Maritime Association, says trends are reversing, and cargo is beginning to again flow more freely. Coupled with the port’s improvements, he expects the more recent lag in vacancies “will start to go away.”

That could be good news for large projects underway, including more than 3.6 million square feet spread across 11 spec buildings that are either being constructed or anticipated, Colliers reported. That’s on top of four such buildings, totaling more than 1.4 million square feet, completed last year.

Developers Matan and the Rockefeller Group are planning a 5 million-square-foot industrial park on 500 acres in Suffolk, with five spec buildings, two of which are set to be completed by the end of 2025.

“They’re having really good activity for those buildings, and maybe some other activity as well,” Deputy City Manager Kevin Hughes says. Gov. Glenn Youngkin announced in July that the City of Suffolk would receive $30.1 million to widen a 2.3-mile stretch of Route 460 to support the development.

Other high-profile projects are also continuing. Amazon.com is on track to complete a 219,000-square-foot delivery station in Virginia Beach in time for the 2024 holiday season, and a robotics fulfillment center, in an adjacent space, is set to be complete in late 2025, company spokesperson Sam Fisher says.

Also in August, the City of Chesapeake received a $35 million grant from the state’s Virginia Business Ready Sites Program to help extend utility infrastructure to the 1,400-acre Coastal Virginia Commerce Park, according to Steven Wright, the city’s economic development director. The state has looked to the megasite as a possible location for a semiconductor or microchip manufacturer. While Chesapeake is continuing to look for funding for development, Wright says it is close to reaching Tier 4 status.

“Everyone that calls is curious about what is the status of the infrastructure to support the property,” Wright says.

  

Growth spurts

Virginia Beach-based law firm Melone Hatley hired its first employee in spring 2021. Three years later, it now has a staff of 50 people and could reach as many as 60 by the end of this year, says Rebecca Melone, the firm’s managing partner.

That growth is part of a strategy that Melone and her business partner, Charles Hatley, hatched in 2020, a few years after founding their firm.

“We didn’t want our business to just be the two of us doing everything forever,” Melone says. “We wanted to really build something.”

That “something” has landed the firm at No. 202 on the 2024 Inc. 5000 list, Inc. magazine’s annual ranking of the nation’s fastest-growing privately held companies by percentage revenue growth. The firm is the top-ranked Inc. 5000 company in Hampton Roads this year, leaping to No. 202 from No. 575 in 2023, and lodging a 1,998% growth rate in revenue during the past three years, up from 1,032% the previous year.

A total of 265 Virginia companies made Inc.’s list, and 24 of those are in Hampton Roads. Sixteen are repeat honorees, running the gamut from legal, security and government services to insurance, real estate, engineering, construction and more.

Melone Hatley was established as a family law firm in 2014, and it has followed the needs of its clients, branching into estate law. In addition to offices in Virginia Beach, Richmond, Loudoun and Fairfax counties and Charlotte, North Carolina, it added an office in Tampa, Florida, during the summer, and could expand to the Midwest by the end of the year, with its sights set on going international in the future, Melone says. The company’s growth will also require adding another layer of management, she adds.

Choice Financial Group, a Virginia Beach-based insurance brokerage with a footprint spanning from New Hampshire to Florida, Ohio and Arkansas, landed at No. 1,174 on Inc.’s list this year, up from No. 1,693 last year. The firm reported 436% growth over the past three years. CEO Bob Hilb attributes about 85% of the firm’s revenue growth to seven completed company acquisitions this year, with a projected 11 to 13 purchases by the end of 2024. Another contributing factor is increased revenue from higher insurance premiums, he says.

Hilb points to the average age of Choice Financial’s partners, 46, as giving the firm an edge.

“We have this real youth and vitality that a lot of our competitors don’t have, and it’s really neat,” Hilb says. “It’s folks that kind of see the vision and are really excited about it, and that also drives a lot of our growth as well.”

Another local Inc. 5000 company, British Swim School, formed in Manchester, England, in 1981 but has been headquartered in Virginia Beach since 2019, when Buzz Franchise Brands, also based in Virginia Beach, became its majority owner. A year later, the world plunged into the pandemic, and demand for swim lessons tanked.

But demand has rebounded post-pandemic, and word of mouth has helped, President Ashley Gundlach says, with the company adding 40 new franchisees in 2024. The company ranked No. 977 on Inc.’s list this year, with 521% three-year revenue growth. Buzz Franchise Brands also snagged Inc.’s notice, ranking No. 1,309 with 395% revenue growth over the past three years.

British Swim School offers swim instruction to all ages, including basic water survival skills, and the franchise reaches more than 450 pools in the United States and Canada, with more than 180 franchisees, Gundlach says.

Despite its growth, the company isn’t building massive pool complexes; instead, its model is based on using pools in hotels or fitness centers that might not see round-the-clock use. The company will likely sell out in available spaces in Canada this year, and it is focusing now on markets where it has less presence, like Boise, Idaho; Omaha, Nebraska, and Oklahoma City.

“When you have happy customers, you have more people who are inquiring about becoming an owner themselves,” Gundlach says. 

County grants boost early-stage entrepreneurs

As an early-stage startup founder, Ray Magee grew accustomed to hearing ‘no.’

In the eight years since he founded Centreville-based BloomCatch, a plant recognition app, Magee reckons he’s applied for seven or eight grants. So, when BloomCatch landed a $50,000 grant from Fairfax County in November 2023, he admits to some initial disbelief.

“I thought, ‘There’s no way,’” Magee recalls.

BloomCatch was among five early-stage technology startups to receive $50,000 grants in an inaugural round from the Fairfax-based Fairfax Founders Fund, which supports early-stage, high-growth startups based in the county.

The company is among a growing number of startups taking advantage of a variety of programs launched by Northern Virginia counties seeking to boost entrepreneurship, particularly among underrepresented founders.

Fairfax, already an established home for government contractors and tech companies, recognized a “need for there to be a stronger innovation ecosystem, a stronger support system and network for startup companies here,” says founders fund manager Eta Nahapetian.

Arlington County recognized a similar need to generate local activity, says Michael Stiefvater, Arlington Economic Development’s business investment group director.

Fairfax Founders Fund started with an initial $1 million allocation from the county and plans to announce its second cohort in coming weeks, with a third application round planned for early 2025.

The Arlington Innovation Fund, which focuses on early-stage tech companies, also received a $1 million initial infusion from its local government, $400,000 of which was distributed via the county’s Catalyst Grant program, which awards $25,000 to $50,000 grants to Arlington-based startups. A separate Arlington Innovation Fund program is devoted to building the tech ecosystem through programming and partnerships.

Arlington has announced two cohorts of Catalyst grantees — five companies in February and four in June. Applicants are vetted to ensure companies have completed business licensing requirements, customer discovery and more, and grantees are also reviewed along the way to see how they are faring.

Arlington and Fairfax will review their grant programs before deciding whether either will continue.

The Fairfax grant has helped BloomCatch blossom by providing funding for participating in trade shows, fine-tuning its app and adding four part-time staffers, including a salesperson. Since its founding, BloomCatch has raised about $480,000 and is on track to bring in six figures in annual revenue for the first time this year.

“We are growing,” Magee says.  

CAV Angels hits $20 million+ milestone

When Greg and Marion Werkheiser connected with CAV Angels during their search for seed investors for their augmented reality software startup in 2018, the couple reaped benefits beyond an initial $300,000 infusion.

“The investment itself gave us credibility to other investors,” says ARtGlass CEO Greg Werkheiser, a 2000 graduate of the University of Virginia School of Law who co-founded the Richmond-based company in 2017. It also gave him a continuing relationship with CAV Angels investors — each of whom have ties to U.Va. — who advise and encourage ARtGlass, which enables sites like George Washington’s Mount Vernon to develop immersive experiences for patrons.

The ties to the U.Va. community also “gave us a sense of comfort that these people were interested, perhaps, in us for more than just what their rate of return is gonna be,” Werkheiser says. To date, CAV Angels has invested $1.375 million in ARtGlass.

ARtGlass’ success is just as important to CAV Angels. Founded in 2015, the nonprofit Charlottesville-based investment club is not affiliated with U.Va. but links high-potential startups with ties to the university to its network of 150 accredited investors. CAV Angels hit a milestone in summer 2023 when it surpassed $20 million in investments; by late 2023, it had invested more than $23 million.

“It will be at $25 [million] before you know it,” says CAV Angels Managing Director Rich Diemer, a 1980 graduate of U.Va.’s McIntire School of Commerce.

CAV Angels has 50 portfolio companies, among them a variety of innovative Virginia companies, including Richmond’s BrainBox Solutions and Charlottesville’s Astraea and Luminoah. About 30% of the group’s investments have been in women-founded companies, and two of its investments, in Boston-based autonomous underwater vehicle company Dive Technologies and Oregon-based biotech firm Phitonex, have monetized at six times their valuations.

Individual CAV Angels choose which startups to invest in. Because listening to pitches and reviewing due diligence reports is time-consuming, some investors may consider a $5 million sidecar fund announced by CAV Angels in late 2022. Accredited investors can commit money to the fund, and a separate committee makes investment decisions. Unlike traditional pooled funds, which take 20% of profits for the fund managers, CAV Angels will take 10% for the manager, and 5% donations each for CAV Angels and organizations benefiting U.Va. such as CvilleBioHub and the alumni association.

That approach “could broaden our appeal to some investors,” Diemer says.  

NW Harrisonburg sees revival with investment

Northwest Harrisonburg used to be a place to buy a tire. Beyond the 116-year-old City Produce Exchange building, which was converted into lofts in 2006, and the Local Chop & Grill House, which opened in the same building in 2009, there wasn’t much else to draw people to that corner of the city.

That’s changing, though. The resurgence of downtown Harrisonburg has spread from its core, bringing attention to what’s informally known as the “Bird District,” due in part to a partnership between local entrepreneur Kirsten Moore and real estate developer Bismarck, and several businesses with bird-themed names.

In 2017, Bismarck’s president, John Sallah, purchased a former tire store and garage along with an adjacent lot and a 21,000-square-foot warehouse along North Liberty and West Gay streets for a little more than $1 million. He approached Moore, who operated The Hub, a coworking space, with the idea of expanding her operation into the former tire store.

“I walked into the building and knew it could be so much more than a coworking space,” recalls Moore. In August 2020, she opened the Magpie Diner and the Bakery at Magpie in the space, and also moved her coworking hub, rebranded as The Perch, there too. The building is also home to Chestnut Ridge Coffee Roasters. Across the street, Sage Bird Ciderworks opened in 2020 in the garage Sallah renovated.

In October 2023, after a $2.5 renovation, Moore opened the Liberty Street Mercantile, a collection of shops and an event space, in the warehouse, the former home of the Harrisonburg Grocery, which closed in the 1970s. In December, the city’s first wine bar, Rootstock, opened in the mercantile.

More than $150 million was invested in the city’s downtown between 2004 and the end of 2022, says Andrea Dono, executive director of Harrisonburg Downtown Renaissance, or HDR. (A breakdown for Harrisonburg’s northwest corner was not available.) 

HDR and the city are funding a public art installation in the northwest end of town to welcome people into the district. A bike lane along Liberty Street, funded by a $14.3 million federal grant, is also planned to open by 2029.

While the Bird District may not be an official spot on maps yet, Dono says, it’s an extension of local entrepreneurship happening across downtown Harrisonburg. “It’s authentic to us, [and] that’s what tourists like, too. It’s really the best of all worlds.”