Data centers—giant warehouses that supply the tremendous computing power needed for artificial intelligence—are sprouting up all over the state. Until recently, building approvals were often granted in secret deals with town leaders, leaving residents to contend with pollution, round-the-clock humming and soaring energy prices.
But the backlash has begun, and local residents are now protesting proposed data centers, packing meetings where leaders are banning future centers, protesting at AI construction sites and pushing for regulation.
Since 2024, when then-Governor Phil Murphy created $500 million in tax incentives for companies focused on AI, there has been an AI building boom in New Jersey. As many as 80 data centers are now operating in the state, with many more proposed, awaiting community approval or under construction. (The exact number of centers and their sizes is hard to pin down due to a lack of regulation.)
These massive AI hubs, known as hyperscale data centers, consist of row upon row of warehouses that can run for miles, filled with high-tech servers. Some require enough electricity to power a small city and use millions of gallons of water each year to cool the computer systems that run 24 hours a day. They bring air, noise and light pollution, change the landscape, and can reduce property values.
Many data centers supplement their electricity usage with highly polluting diesel-powered generators, since the electric grid often can’t support such heavy power needs. During a heat wave in July, the federal department of energy ordered data centers to rely on diesel or gas-powered generators to avoid straining the grid.
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Most AI data centers operating in New Jersey have sprung up with the blessing of town leaders before residents knew anything about them. New Jersey is not alone in this: A review by NBC News of more than 30 data center proposals across 14 states found that, in many cases, local officials signed nondisclosure agreements and negotiated with shell companies that made it difficult to identify project developers.
The massive DataOne Center in Vineland, for example, one of the largest on the East Coast, sits in an area once known for its farmland. It began operating in late 2025 and is still expanding. When completed, it will be 2.6 million square feet and use 300 megawatts of electricity and 20 million gallons of water each year. The site was approved by the town’s planning board in June 2024 and moved into construction with little community input. (After this story went to press, the state Department of Environmental Protection announced that DataOne must pay a $1.07 million fine for using 62 natural gas generators without required permits—the largest-ever fine against a data center in New Jersey, according to Governor Mikie Sherrill’s administration.)
But as residents have woken up to the costs of data centers, the state government is doing a turnaround. Two years ago, Murphy said he wanted New Jersey to become a “national leader” in the industry, claiming it would create jobs, bring tax revenue, and boost the economy, and offered $50 million in tax breaks. This summer, Sherrill put a moratorium on the tax breaks and signed legislation that will begin to hold AI companies accountable for their energy and water use.
Soaring energy prices, a key issue for consumers and a focus of Sherrill’s election campaign, are fueled in part by AI’s huge demand for energy to power their servers and cooling systems. A report by the New Jersey Policy Perspective, a nonpartisan think tank, links the surge in AI data centers to a roughly 20 percent jump in electric bills in New Jersey in the summer of 2025. A large AI data center can use as much electricity as 100,000 homes, the report says.
Last year, New Jersey’s average annual household electric bill rose by about $260, the sharpest increase in energy costs in the country, according to federal data. That’s largely due to demand from AI data centers, according to regional grid operator PJM.
Air pollution tied to data centers is causing billions of dollars in public health damage nationwide, the report also alleges.
“New Jersey families are getting hit twice,” says Alex Ambrose, a policy analyst for the think tank. “They’re paying more each month in electricity bills to subsidize data center expansion, and they’re breathing dirtier air because these facilities are keeping polluting power plants running.”
The cooling systems also require huge amounts of water. In 2024, more than 14 billion gallons were used in AI data centers, a number that could double in the next two years, according to the Pew Research Center.
Then there are noise concerns. A group of homeowners who live near the behemoth Vineland center have filed a class-action suit in federal court, saying that the center’s constant humming noise from heavy industrial cooling equipment, HVAC fans and backup generators interferes with their sleep, causes anxiety and diminishes their property values. Local noise ordinances, which were not designed to address the round-the-clock, low-level hum of a data center, don’t help.
In addition to the significant downsides of data centers, the upsides are not as promised either, according to Ambrose. “Data centers don’t really bring local economic benefits. They require very little maintenance once they’re built,” she says. “Though they do create construction jobs, those are short term, and data centers have one of the lowest number of employees per square foot of any other industry. So not only are they bringing all these harms, they’re also not bringing local benefits.”
Officials from the data centers counter that their facilities are key parts of New Jersey’s economy and essential parts of our digital infrastructure. According to the Data Center Coalition, a nationwide trade association, data centers supported more than 96,000 jobs and contributed more than $17 billion to the state’s economy in 2023.
Addressing other issues with data centers, the Data Center Coalition’s executive vice president of state policy and government affairs, Dan Dorio, says that the problem of energy-price spikes could be passed back to the data centers if utilities tracked their increased load on the grid. Water use is “far less” than other industries, he says, and new centers are increasingly using a “closed-loop” system, so a huge amount of water is only necessary for the initial fill. In addition, data centers adhere to local noise ordinances, he says, and the industry is working toward using liquid cooling instead of loud fans.
Still, residents are crying “not in my backyard.” The stealth opening of the Vineland data center inspired residents of nearby Monroe Township to fight successfully to ban AI centers on roughly 100 or more acres of farmland where a massive warehouse project had been proposed and preliminarily approved. Townwide bans have followed across the state in Andover, Pemberton, Millville, Red Bank, Warren, Neptune and Asbury Park. In Nutley, residents are worried that a data center will be approved on an 11-acre parcel on the former Hoffman-La Roche campus, where data centers are a permitted use.
Recent protests to stop a nearly 400,000-square-foot data center from being built on part of the former Merck campus in tiny Kenilworth, however, came too late. The project of the Livingston-based company CoreWeave was approved unanimously by the Kenilworth planning board in May 2025, and construction has begun, but residents say they only recently learned that the facility was coming to the community.
“They’re gonna get $1.8 billion from this project. We’re not gonna get anything besides less clean water for us, less drinking water, more pollution,” Alyssa Magnifico, 22, who lives about 200 feet from the data center, told NJ.com. The site sits near the borders of Union, Roselle Park, Cranford, Springfield and Westfield, whose residents joined the protests.
The new state regulations, which apply only to future data centers, are a step toward holding data centers accountable for their energy and water use. Centers will have to pay more for energy to protect consumers from price increases, use some clean energy, and pay for grid upgrades. Energy and water usage must be reported to the state every six months. “Both of these bills were vetoed by Governor Murphy last session,” says Ambrose. “So it’s very exciting to see them moving forward now.”
Sherrill’s administration also wants standards that require developers to address concerns about noise, light and pollution. One proposed bill would regulate AI data centers currently under consideration, including banning data centers from using nondisclosure agreements with local officials; another would require new AI data centers and cryptocurrency-mining facilities to obtain some of their electricity from renewable or nuclear energy.
Some say these proposals don’t go far enough and are calling on Sherrill to put a moratorium on new data centers while impacts are being assessed and regulations put in place. In July, Governor Kathy Hochul of New York enacted the first statewide moratorium on construction permits for data centers.
But these efforts to rein in data centers are beginning to face industry opposition. A developer who wants to build an AI data center on the former site of Newton Airport in Sussex County is suing Andover Township over its AI ban. Another builder is suing Monroe Township for $300 million, saying that, in banning data centers, Monroe violated the state’s municipal land-use law and the town’s application procedure.
On the national level, President Donald Trump has pushed for data center expansion and criticized Hochul’s moratorium as bad for the economy.
