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

The multibillion-dollar AI data center campus currently under development in Birmingham is hitting the brakes on requested design changes following the city’s recent implementation of strict industry regulations.

Nebius Inc., the company behind the Oxmoor Valley project, recently sought city approval to modify the design of its second building. However, the company opted to withdraw its permit revision request to avoid the additional regulatory hurdles introduced by the city’s new zoning ordinance, which took effect June 13.

Design Revisions Withdrawn

Nebius spokesman John Sutter explained the scope of the original proposal: “We submitted a permit revision for the second building so outside equipment could be stored in a basement space. In no way did these proposed design changes affect the project’s building footprint, power, or compute capacity, and, after initial feedback from the city, we decided to withdraw the revision and proceed as previously approved.”

The request, initially filed by Hoar Construction on June 11, aimed to update a building permit granted in the spring. The proposed adjustments included adding a basement to house mechanical equipment and increasing the building's height to accommodate the change. [Can’t see the map? Click here.]

New Rules for Data Centers

City spokesman Rick Journey confirmed to 205focus.com that the city’s prior moratorium on data centers expired on June 13, giving way to the current ordinance. Under these rules, existing facilities with previously approved permits are classified as “legal, non-conforming.”

“As of that date, any expansion of an existing hyperscale facility with an approved permit is subject to the updated regulations,” Journey stated. Because the project does not meet the new zoning requirements, any future expansions would require a formal exception from the city’s Zoning Board of Adjustment.

Furthermore, any modifications must now pass through the Oxmoor Steering Committee. “Staff has determined that the proposed expansion would require a new review by the Oxmoor Steering Committee,” Journey added.

A High-Stakes Environment

The new regulatory framework arrives after a contentious public hearing where City Council members emphasized the need for oversight regarding size, power consumption, and water usage in hyperscale projects.

While city officials have maintained they cannot halt the progress of work already approved for the Nebius campus, the project remains a focal point for controversy. The facility is currently the subject of a lawsuit by homeowners and has faced significant pushback from local advocates.