The data center DataOne is building in Vineland, New Jersey, to provide AI capacity to Nebius and Microsoft is facing growing pushback from neighbors and environmental groups. An investigation published by Floodlight says the facility has been running dozens of gas generators without the required environmental permits, while local authorities have gone as far as halting work on other infrastructure at the site, including a 1.5-million-gallon liquefied natural gas (LNG) tank.
The Vineland data center dispute in 30 seconds
- A thermal-imaging investigation found 45 generators running out of 62 installed at DataOne’s data center.
- New Jersey’s Department of Environmental Protection confirmed to investigators that those units lacked the required state permits.
- The facility could reach 300 MW, and Nebius will supply Microsoft with dedicated capacity from it.
- Vineland also ordered a halt to work on the LNG tank and the fuel cells.
- Neighbors have been complaining for months about noise and a lack of information about the project.
Microsoft’s connection to the project is indirect but significant. Microsoft neither owns nor operates the data center. Nebius commissioned DataOne to build the facility and later signed a multi-year deal to provide Microsoft with dedicated capacity from Vineland. Nebius officially announced that contract in September 2025, though it didn’t disclose its total value at the time.
The dispute also lands at an awkward moment for Microsoft. In January 2026, the company unveiled its Community-First AI Infrastructure program, with commitments to reduce the impact of its own data centers on communities, electricity, and water. However, those commitments apply specifically to facilities that Microsoft builds, owns, and operates — a meaningful distinction in Vineland’s case.
62 Generators, at Least 45 of Them Running
The main flashpoint in the dispute is electricity.
A Floodlight investigation used thermal imaging to survey the equipment installed at the complex and documented 62 gas generators, at least 45 of which were running during one of the observations made in August.
New Jersey’s Department of Environmental Protection (NJDEP) confirmed to Floodlight that it had not issued permits for those generators. The investigation argues that using the equipment could also raise questions under federal air-quality law, though for now these remain allegations and ongoing investigations, not a federal violation established through a court ruling.
The situation is especially significant because energy has become one of the main obstacles to deploying new AI data centers.
Nebius announced in March 2025 that its New Jersey facility would have a design capacity of up to 300 MW. The company also said it would work with DataOne and use behind-the-meter power generation to feed part of the infrastructure.
That reduces immediate reliance on the conventional power grid, but it shifts part of the energy problem onto the site itself.
DataOne’s plans have evolved during construction. Among the solutions proposed are natural gas engines and, more recently, large fuel-cell installations from Bloom Energy, also powered by natural gas.
The project expects to source around 85% of its electricity through on-site generation, according to information the company has made public, with the remaining 15% coming from Vineland Municipal Utilities and Atlantic City Electric.
The need to secure electricity quickly helps explain why major AI projects are looking at solutions that were far less common at a data center just a few years ago.
Waiting solely on new grid connections and expansions can delay a facility for years. Generating power on-site speeds up deployment, but it brings new environmental, safety, and permitting requirements.
A 1.5-Million-Gallon Tank and Stop-Work Orders
Generators aren’t the only source of conflict.
DataOne plans to build a tank inside the complex with capacity for 1.5 million gallons of liquefied natural gas — roughly 5.7 million liters — that would serve as a backup supply if the pipeline feeding gas were interrupted.
The facility is part of an energy system on a scale unusual for a data center.
The reviewed plans include large fuel-cell arrays, cooling systems, LNG storage facilities, and a water tank of around 27 million gallons.
The problem surfaced when work began on some of those installations before all municipal approvals were in place.
The city of Vineland issued stop-work orders in August covering the LNG tank and the Bloom Energy units. In the tank’s case, authorities said work had been carried out before the corresponding building permit was obtained.
DataOne has argued that the work carried out was limited to placing equipment within a previously approved plan, and has said the temporary pause shouldn’t affect its overall schedule.
There are also questions related to water.
An engineering review commissioned by groups opposed to the project has raised concerns about stormwater management and aquifer recharge. These claims come from groups and experts involved in the debate over the project and don’t amount to a final ruling from environmental authorities.
The most immediate complaints from neighbors, though, have to do with something much easier to notice: noise.
Residents living roughly half a mile from the facility began complaining in late 2025 about a continuous hum, especially at night. Some neighbors have taken their complaints to court.
The combination of noise, generators, fuel storage, and the sheer size of the complex has turned the project into an example of the friction that arises when the infrastructure AI needs gets built close to residential areas.
Microsoft Is at the Center of the Debate Even Though It Doesn’t Own the Data Center
Microsoft’s role needs some context.
Nebius announced a multi-year agreement on September 8, 2025 to provide Microsoft with dedicated AI infrastructure from the new Vineland data center. The contract made Microsoft the most visible customer tied to the facility.
But there’s a corporate chain between the companies involved.
DataOne develops and operates the physical infrastructure. Nebius has secured capacity at the complex and provides AI infrastructure services. Microsoft, in turn, contracted capacity from Nebius.
That’s why pinning the construction of the generators or the LNG tank directly on Microsoft would be inaccurate.
Sustain South Jersey and Stand.earth argue, however, that Microsoft should get involved given its position as the largest end customer of the installed capacity. Both groups have asked the company to act on the alleged irregularities and residents’ complaints.
The debate has also gained visibility because of commitments Microsoft itself announced this year.
Its Community-First AI Infrastructure initiative sets five broad goals for the data centers Microsoft builds, owns, and operates in the United States: covering the electricity costs they generate, reducing and offsetting water use, creating local jobs, contributing tax revenue to communities, and investing in local training and organizations.
The company later announced it would stop using non-disclosure agreements with local governments during the early stages of new projects, as part of its push for greater transparency.
Vineland is precisely testing the limits of that kind of commitment when the infrastructure doesn’t belong directly to the hyperscaler.
Demand for AI compute is creating an increasingly complex chain of suppliers: GPU makers, data center operators, neoclouds like Nebius, and large tech customers buying long-term capacity.
When a local conflict arises, it becomes harder to pin down exactly where each company’s responsibility ends.
The case also illustrates another consequence of AI’s growth. The bottleneck is no longer just about getting hold of GPUs.
A data center running into the hundreds of megawatts needs electricity, cooling, water, networking, energy storage, and enough permits to operate all of that infrastructure. If any one of those pieces arrives late, having thousands of accelerators sitting idle doesn’t solve the problem.
In Vineland, the search for fast electrical capacity has ended up putting something far more traditional than artificial intelligence at the center of the debate: generators, natural gas, noise, municipal permits, and neighbors who want to know what’s being built next to their homes.
Frequently Asked Questions
Does Microsoft own the Vineland data center?
No. The data center is being developed by DataOne for Nebius. Nebius has signed an agreement to provide Microsoft with dedicated AI capacity from this facility.
How many gas generators does the data center have?
A Floodlight investigation documented 62 installed generators and observed, through thermal imaging, at least 45 running simultaneously. The NJDEP confirmed to investigators that it had not issued permits for those units.
What capacity will the New Jersey data center have?
Nebius originally announced a design capacity of up to 300 MW, to be rolled out progressively. That’s a large enough scale to place the project among the major US infrastructure built for artificial intelligence.
Why does it need a 1.5-million-gallon LNG tank?
The liquefied natural gas would serve as a backup supply in case the pipeline feeding the facility’s power generation systems is interrupted. The project includes a tank of approximately 5.7 million liters.
