AI company backtracks on change to data center campus after Birmingham’s new rules

Nebius Inc., the company behind the multibillion-dollar data center project in Birmingham, is hitting the brakes on its latest expansion plans. The company has officially withdrawn a permit request for its second facility in Oxmoor Valley, opting to stick with its original, pre-approved design rather than navigate the city's fresh set of data center regulations.

Navigating New Rules

The pivot comes just as Birmingham’s updated zoning ordinance took effect on June 13, replacing the city's previous moratorium on data center development. Nebius spokesman John Sutter explained that the requested revision was intended to store equipment in a basement level. According to Sutter, this adjustment would not have changed the building's footprint, power consumption, or compute capacity. However, after receiving initial feedback from city officials, the company decided to pull the request to avoid the new regulatory hurdles.

The initial permit application, filed by Hoar Construction on June 11, sought to modify a design that the city already approved in the spring. [Can’t see the map? Click here.]

Legal Status and Oversight

City spokesman Rick Journey confirmed to 205focus.com that while the city’s moratorium concluded on June 13, the existing Nebius facility is now classified as “legal, non-conforming.” This means the site is grandfathered in under previous rules, but any future deviations require a formal exception from the city’s Zoning Board of Adjustment.

Furthermore, Journey noted that staff determined the proposed expansion would have required a fresh review by the Oxmoor Steering Committee. This additional layer of oversight was a point of emphasis during the recent hearing on the data center ordinance, where council members pushed to ensure that existing projects wouldn't bypass public review if they grew beyond their initial scope.

The Broader Impact

The new regulatory framework enforces 20 specific conditions regarding power, water, and size for hyperscale data centers. While city officials have maintained they cannot stop the original Nebius campus plans, the project remains a flashpoint for tension in the community. The development is currently the subject of a lawsuit filed by homeowners and continues to draw fire from local advocates.