Kentucky Industrial Alliance has filed two lawsuits against Cave City, Kentucky, after local officials approved a one-year moratorium on new data centers, escalating a broader conflict between municipalities and companies racing to construct AI infrastructure.

The developer submitted plans for a 600-acre, 1.2-gigawatt AI and cloud computing campus north of downtown Cave City, with a projected investment of $4.8 billion. At 1.2 gigawatts, the facility would consume power comparable to a large nuclear reactor, reflecting the enormous energy requirements driving the AI infrastructure buildout that has accelerated since the widespread adoption of generative AI tools beginning in late 2022. Days later, city officials enacted the moratorium, citing the need for time to evaluate developments of that scale.

According to The Lexington Herald-Leader, Kentucky Industrial Alliance is also challenging Cave City's 2024 annexation of the property. The developer argues the land should fall outside city limits, where the moratorium would not apply.

"I'm 100% against a data center being the identity of the entrance to Mammoth Cave," Cave City councilwoman Leticia Cline told The Lexington Herald-Leader.

The proposed campus sits near Mammoth Cave National Park—home to the world's longest known cave system—drawing opposition from residents and local officials who cite concerns about groundwater, sinkholes, power demand, and other environmental impacts tied to the region's karst landscape. Karst terrain is characterized by soluble limestone that creates underground drainage networks, making area aquifers especially vulnerable to contamination from surface activity.

The case emerges as lawmakers across the United States move to slow AI data center development. States including Maine, New York, Pennsylvania, Michigan, and Virginia have considered or advanced moratoriums or other restrictions on new projects, citing concerns about their effects on local communities and power grids.

In March, the National Parks Conservation Association warned that the industry's rapid expansion—driven by a more than 500% increase in data center development in Virginia since 2015—underscores the need for stronger safeguards around national parks.

Kentucky Industrial Alliance disputes the environmental concerns. The company states the campus would use a closed-loop cooling system, create approximately 360 direct and indirect jobs, and generate millions of dollars in annual tax revenue.

"Every major project deserves thoughtful consideration based on accurate information and respectful discussion," the company said in a statement.

Opposition to AI infrastructure extends beyond Kentucky. Earlier this month, Georgia resident Ansley Brown said in an Instagram post that her family settled with Georgia Power after concluding they could no longer afford to contest the utility's acquisition of land for a transmission line expected to primarily serve AI data centers. Georgia Power says the project requires acquiring more than 300 parcels of land and that 70% to 80% of the electricity carried by the new line will supply data centers.