Judge dismisses data center lawsuit against Birmingham zoning board

A legal battle surrounding a major AI infrastructure project in Birmingham has come to an abrupt end. A Jefferson County Circuit Court judge officially dismissed a lawsuit against Birmingham’s zoning board, which had been filed by the cloud computing firm Nebius Inc. regarding its multibillion-dollar data center development.

The Dismissal

According to court records, Judge Shera Grant granted the motion for dismissal on Thursday afternoon following a request from the company itself. It remains unclear why Nebius, along with affiliates Alabama ADC Holdings, LLC and general contractor DPR Construction, opted to drop the litigation initiated on May 11. Representatives for the company, its legal team at Fortif Law Partners LLC, and the city have not yet provided comment on the development.

Zoning Conflict

The lawsuit stemmed from the city's reversal of initial zoning decisions concerning power infrastructure planned for Milan Parkway. The conflict began at a March 26 meeting, where a board vote on a power substation was initially deemed an approval, only for city attorney Nicole King to later clarify that the result actually constituted a denial.

Furthermore, the board denied a separate request for a switching substation intended to manage electricity flow. Nebius had argued that these facilities were private infrastructure and thus exempt from municipal zoning approval—a position the city eventually adopted. In an April 9 memo, King noted that because the facilities were not designed to serve individual neighborhoods, they did not meet the definition of a 'utility substation' and therefore should not have required board intervention.

Project Scope

Nebius has committed to funding the necessary power infrastructure for its Oxmoor Valley site, with Alabama Power confirming the capacity to support the required 300 megawatts. To put that in perspective, the facility will demand power equivalent to lighting up 385,000 homes during peak usage. Despite the scale, both the company and Alabama Power have stated the facility will not impact resident power bills.

The Amsterdam-based firm acquired 75 acres in the Oxmoor Corporate Park last autumn. While the land was already zoned for data centers, the company submitted its initial permits just before the city implemented a six-month pause on new data center development.