LOUDOUNT COUNTY, Va., July 7 — Stolen copper from the construction sites of artificial intelligence data centers is quietly finding its way into the scrap metal supply chain, where cash transactions make it nearly impossible to separate legitimate material from looted goods. The problem is not new, but the scale of it is drawing fresh attention from law enforcement and state regulators. In 2023, the Institute of Scrap Recycling Industries reported that 40% of scrap copper transactions in the U.S. involved cash payments.
That statistic alone explains why tracing stolen metal is so difficult — when no digital record exists, the trail goes cold fast. Virginia already has a law on the books requiring scrap dealers to record seller identification and hold payments for 48 hours.
But enforcement, according to those who watch this issue, varies widely from jurisdiction to jurisdiction. A dealer who wants to look the other way can usually find a way to do so. In 2024, the Virginia General Assembly took up a bill — HB 1234 — that would have tightened things considerably.
It proposed requiring electronic records and photo identification for all copper sales. The bill has not passed.
The U.S. Department of Justice has estimated that scrap metal thefts cost businesses $1 billion every year. Of that total, copper alone accounts for 60% of the losses. For data center construction sites, which use enormous amounts of copper wiring for power and networking, the vulnerability is obvious.
Undercover operations yield arrests
In Northern Virginia, the Loudoun County Sheriff’s Office ran undercover operations in 2023 targeting scrap dealers who were buying stolen copper. Those operations led to 12 arrests. The details of those cases — the dealers involved, the amounts of copper recovered — paint a picture of a market where stolen goods move with relative ease.
Loudoun County is the heart of the data center industry in the United States. The construction boom there has been remarkable, with new facilities rising continuously.
But that boom has also created a steady supply of copper scrap, some of it legally discarded, some of it taken by workers or outsiders who know the value of what they are carrying away. The economics are straightforward. Copper prices remain strong.
Scrap dealers pay cash, no questions asked. A person walking in with a few hundred pounds of wiring can leave with hundreds of dollars in hand, and no one records their name.
The Institute of Scrap Recycling Industries has acknowledged the problem. Their 2023 report, which found that 40% of copper transactions were cash-based, is often cited by law enforcement as evidence that the current system is not working as well as it should.
Legislative efforts stall
HB 1234 represented an attempt to close the gap. The bill would have required dealers to maintain electronic records of every copper purchase, including a photo of the seller’s identification. It would have made it far harder for stolen copper to move through legitimate channels.
But the bill never became law. It remains in the legislative record as a proposal that did not advance.
Whether it will be reintroduced in a future session is not yet clear. Supporters of tighter regulations say the problem is not going away, and that the data center construction boom is only intensifying the pressure on the scrap metal market. The Virginia state law that currently exists — requiring seller identification and a 48-hour hold on payments — is better than nothing, but it depends on enforcement.
And enforcement, as the Loudoun County undercover operations showed, requires resources and commitment. Twelve arrests in one year in one county suggests that the problem is widespread enough to warrant attention.
The U.S. Department of Justice’s estimate of $1 billion in annual losses from scrap metal theft is a reminder that this is not a small problem. Sixty percent of that figure comes from copper alone. For data center operators, for insurers, and for the communities that depend on these facilities, the cost is real.
What to watch next is whether Virginia’s General Assembly revisits HB 1234 or something like it. The bill did not pass in 2024, but the facts on the ground have not changed. Copper is still valuable.
Data centers are still being built. And cash transactions still make it easy to sell stolen goods.
For anyone involved in construction, security, or scrap metal dealing, the message from law enforcement is clear: the rules exist, and they will be enforced. For the rest of us, it is worth knowing that the copper in our data centers — the metal that carries our information, our medical records, our communications — is being protected, even if imperfectly.
