For months, government officials across the country have been hearing a growing message from constituents: No AI data centers in our backyard.
Controversies about the use of AI platforms like ChatGPT, Claude, and Google Gemini have become a national conversation. And AI critics point out that the infrastructure required to support these platforms has significant environmental impacts.
That’s why the small Kentucky town of Cape City temporarily banned AI data centers. In May, city council members issued a 12-month moratorium to research the construction plans for a data center near the entrance to Mammoth Cave National Park.
But the AI company looking to build the data center, known as Kentucky Industrial Alliance, LLC, is fighting against that waiting period. The company has filed a lawsuit to overturn the council’s moratorium — despite the objections of local leaders.
“I’m 100% against a data center being the identity of the entrance to Mammoth Cave,” Leticia Cline, a Cave City councilwoman, told the Lexington Herald-Leader.
This conflict is far from the only example. Several AI companies are trying to force the construction of data centers in local jurisdictions throughout the U.S. — even as elected officials raise concerns about impacts to water and the environment.
AI Data Center at Mammoth Caves
The conflict in Cape City is one of the clearest examples so far of the environmental concerns about data centers.
Opponents aren’t only worried that the $4.8 billion data center — tentatively named Cave Point Commerce Center — would be built near Mammoth Cave National Park. The park is also the epicenter of the world’s largest known cave system, which stretches far beyond the park’s boundaries.
That’s significant because AI data centers consume enormous amounts of water to prevent their servers from overheating. Some data centers can consume up to 5 million gallons per day, equivalent to the water use of a town with 10,000 to 50,000 people, according to the Environmental and Energy Study Institute.
That water use becomes even more salient in the context of Cape City. The area’s cave system means that groundwater and surface ecosystems are interdependent, so officials wanted more time to gauge the development’s impact on the environment.
Kentucky Industrial Alliance’s plans for the data center include 10 buildings, each about 200,000 square feet. Thanks to a closed-loop water system, the entire site would use as much water as a single office building, or 300,000 gallons a day, according to a draft economic impact analysis published by the company in June.
However, environmental arguments are absent from the company’s lawsuit. Instead, Kentucky Industrial Alliance claims the data center moratorium is illegal and “violates its due process rights,” according to legal documents.
Lawsuits a Growing Strategy to Force Construction
Cape City is not the only town facing expensive lawsuits from multi–billion-dollar companies trying to force the construction of data centers. As more local governments push back against them, several AI companies are trying to bypass concerns through the courts.
- California’s Imperial Valley: This area of California is dominated by agriculture that relies on water from the Colorado River, which is already facing a water crisis. After two cities voted against plans for a $10 billion data center, Imperial Valley Computer Manufacturing filed a lawsuit to gain access to the river, anyway. The company says it needs 287 million gallons from the river to power the 330-megawatt facility, which would be the largest in the state.
- New Jersey: At least two towns in New Jersey are facing lawsuits from AI companies after heated public meetings and backlash from residents led to construction bans. This week, Hexa Builders LLC filed a $300 million lawsuit against Monroe Township in Gloucester County for blocking its proposed data center. Earlier this month, National Land Developers LLC filed a lawsuit to overturn Andover Township’s data center ban. In both cases, residents cited environmental impacts as a concern.
At the same time, there may be even more lawsuits filed against companies trying to build data centers. Environmental groups like the Sierra Club and Earthjustice have sued over the environmental impacts of AI infrastructure. Even homeowners and local governments have begun suing.
For many environmentalists, however, t4b here’s no better example of the need for careful consideration than when a data center threatens public lands.
“The rapid and unchecked pursuit of new technologies must not come at the expense of our national parks,” said Kyle Hart, senior program manager for the National Parks Conservation Association. “We’ve seen what can happen when this industry grows unchecked, and we cannot allow it to continue.”
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