A proposed $4.8 billion AI data center near Mammoth Cave National Park has turned into a legal fight in Kentucky, with developer Kentucky Industrial Alliance suing Cave City after officials moved to stop the project.
According to The Lexington Herald-Leader, the company filed two lawsuits after Cave City approved a one-year moratorium on new data centers just days after receiving plans for a 600-acre AI and cloud computing campus north of downtown. The site is designed for 1.2 gigawatts of capacity.
Two lawsuits target the moratorium and annexation
The developer is not only challenging the one-year pause on new data centers. It is also contesting Cave City’s 2024 annexation of the property, arguing that the land should lie outside city limits. If that position holds, the moratorium would not apply to the proposed campus.
Leticia Cline, a Cave City councilwoman, told The Lexington Herald-Leader, “I’m 100% against a data center being the identity of the entrance to Mammoth Cave.”
City officials and developer offer competing arguments
Cave City officials say they need time to evaluate a development of this scale. Kentucky Industrial Alliance argues the city improperly blocked a project it says would deliver billions of dollars in investment, hundreds of jobs, and millions in annual tax revenue.
The company says the campus would use a closed-loop cooling system, create about 360 direct and indirect jobs, and generate millions of dollars in tax revenue each year.
In a statement, the developer said, “Every major project deserves thoughtful consideration based on accurate information and respectful discussion.”
Location near Mammoth Cave has drawn local opposition
The project has also met resistance because of where it would be built. Residents and local officials have raised concerns about groundwater, sinkholes, electricity demand, and other environmental effects tied to the region’s karst landscape.
The dispute lands at a time of growing scrutiny over data center development near protected landscapes. In March, the National Parks Conservation Association said the industry’s fast expansion showed the need for stronger safeguards around national parks.
The group pointed to a more than 500% increase in data center development in Virginia since 2015.
Broader resistance to AI infrastructure is spreading
The Kentucky case comes as lawmakers in several states move to slow AI data center construction. Maine, New York, Pennsylvania, Michigan, and Virginia have considered or advanced moratoriums or other restrictions on new projects as concerns mount over the strain on local communities and power grids.
Opposition has also surfaced in Georgia. Earlier this month, resident Ansley Brown said in an Instagram post that her family settled with Georgia Power after deciding they could no longer afford to keep fighting the utility’s land acquisition for a transmission line expected to primarily serve AI data centers.
Georgia Power said the project requires acquiring more than 300 parcels of land and that 70% to 80% of the electricity carried by the new line will supply data centers.