Judge dismisses data center lawsuit against Birmingham zoning board
It’s unclear why Nebius decided not to pursue its lawsuit over recent zoning decisions tied to its AI factory plans.
Mason Reed 
A Jefferson County Circuit Court judge has officially dismissed the legal challenge brought against Birmingham’s zoning board by the AI cloud firm behind a massive, multibillion-dollar data center project.
Judge Shera Grant granted the dismissal request on Thursday afternoon, effectively closing the case initiated by Nebius Inc. per court filings. The reasoning behind Nebius’ decision to abandon the lawsuit—which targeted recent zoning decisions impacting its proposed AI factory in the Oxmoor Valley area—remains unconfirmed.
Nebius, alongside affiliates Alabama ADC Holdings, LLC and DPR Construction, had originally filed the suit against the Birmingham Zoning Board of Adjustment on May 11. Representatives for Nebius and its legal team, Charles Prueter and Manning Russell of Birmingham’s Fortif Law Partners LLC, did not immediately provide comment on the matter. Similarly, city spokespeople have not issued a response.
The Path to the Courtroom
Tensions initially flared after the city revised its stance on special exception requests for power infrastructure slated for Milan Parkway. During a March 26 meeting, the board recorded a vote of three in favor, one opposed, and one abstention—a result initially treated as an approval. However, a subsequent memo from city attorney Nicole King on April 9 reclassified the outcome as a denial based on board rules.
The board simultaneously blocked a separate special exception request from Nebius for a switching substation designed to manage electricity flow between lines.
Clarifying Utility Requirements
Nebius previously argued that the structures were exclusively for its private use, thereby exempting them from city zoning approval. The city eventually concurred with this assessment. In her April 9 memo, King noted, “These facilities, as proposed, do not fall within the Ordinance’s definition of a ‘utility substation,’ because they are not intended to serve individual neighborhoods.” She concluded that these matters should not have been brought before the Board of Adjustment in the first place.
The company maintains that it will cover the costs for all necessary power infrastructure. Alabama Power has already confirmed it possesses the capacity to handle the facility's projected 300-megawatt demand—a total roughly equivalent to the peak usage of 385,000 homes over a four-hour window. Both companies have emphasized that the site will not trigger rate hikes for local residents.
Amsterdam-based Nebius acquired 75 acres in Oxmoor Corporate Park last autumn. While the land was already zoned for data center usage, the company’s initial permit filings occurred just before the city instituted a six-month moratorium on new data center developments.
