00:00In a small Wisconsin village, the people living next door to what Microsoft calls the world's most powerful AI data
00:07center have had enough.
00:10And now they are taking the company to court, from a class action over round-the-clock noise, to a
00:17Kentucky lawsuit that hinges on a tiny cemetery from 1902, to newly released emails revealing who really scripted a governor's
00:26veto.
00:26The battle over America's data center boom is getting personal, and the money behind it all just keeps climbing.
00:35We begin in Sturtevant, Wisconsin, where living next to the future sounds like a jet engine that never shuts off.
00:43On July 1, three residents filed a class action lawsuit against Microsoft over its $7.3 billion Fairwater data center.
00:54The same facility Chief Executive Sadia Nadella has celebrated as the world's most powerful AI data center.
01:03The suit covers households within a mile and a half of the site, an area holding more than a thousand
01:09homes, including parts of neighboring Mount Pleasant.
01:13Plaintiffs say Microsoft failed to install adequate sound barriers, letting the roar of cooling fans carry far beyond the property
01:21line.
01:22Along with construction dust, traffic, and light pollution bright enough to wash out the night sky, Microsoft acknowledged the noise
01:31problem in June, blaming cooling fans running at excessive speeds.
01:36But for the neighbors, an engineering fix is no longer enough.
01:42That anger is increasingly ending up in front of judges.
01:46And in Cave City, Kentucky, the fate of a gigawatt-scale data center campus may hinge on a cemetery smaller
01:53than a tennis court.
01:55A new lawsuit filed in Barron Circuit Court claims the city illegally annexed 245 acres of land, because a tiny
02:05burial ground called Shaw Cemetery, just nine hundredths of an acre, recorded as a separate parcel since 1902, sits inside
02:14the tract, and its owners never consented in writing.
02:18If a judge agrees, if a judge agrees, the entire annexation could be voided, and it is only the second
02:24legal front in town.
02:26Developer Kentucky Industrial Alliance is already suing to overturn Cave City's 12-month data center moratorium, which froze its plans
02:36for roughly 381 acres near Interstate 65.
02:41A pivotal hearing is set for July 20.
02:45From the courtroom to the statehouse, in Maine, newly released emails are raising uncomfortable questions about how a first-in
02:54-the-nation data center ban actually died.
02:57When lawmakers passed a statewide moratorium this spring, Governor Janet Mills vetoed it.
03:04Now, records obtained by the Bangor Daily News show a developer helped script that outcome.
03:10Tony McDonald of the Boulos Company had been coordinating with officials in the town of Jay since late March, first
03:19drafting language to exempt the local project, then pressing for letters of support explicitly meant to give the governor, quote,
03:28cover for her veto.
03:30Town selectmen sent the letter.
03:32A labor union was recruited to lobby against an override, and the override failed.
03:38Here is the bitter twist.
03:40The Jay project collapsed anyway, with developer Sentinel walking away from the site in June.
03:47Meanwhile, the sheer scale of this build-out is reshaping entire regions.
03:53Just look at Cheyenne, Wyoming.
03:56Officials in Laramie County are now weighing a temporary worker camp housing up to 5,500 construction workers.
04:05Needed to build the wave of data centers rolling across the high plains.
04:10Ten data centers already operate in the county, and 14 more are in planning or under construction, driven largely by
04:18Microsoft and Meta.
04:20If built at full size, this single camp would hold more people than 84 of Wyoming's municipalities.
04:27A small city of hard hats.
04:30Parked next to a state capital of just 66,000 residents.
04:35The county's planning director argues it is actually the safer path.
04:40Better to keep an estimated 6,000 workers concentrated in one managed location than
04:46scattered across every small town in the region.
04:50And all of that construction feeds one voracious appetite.
04:55Electricity.
04:56During the recent heat dome, the strain finally hit a breaking point.
05:01PJM, the nation's largest grid operator, forecast demand of more than 166,000 megawatts.
05:10Blowing past an all-time record that had stood since 2006.
05:14The federal government stepped in with two emergency orders.
05:19Authorizing PJM to push data centers onto their own backup generators and even wave power plant.
05:26Pollution limits to keep the lights on.
05:29Wholesale prices told the story of a grid under siege.
05:33Rocketing from under $40 to more than $1,600 a megawatt hour in a matter.
05:38Of ours, the cost of keeping the system stable has jumped nearly 70% this year.
05:46To over $16 billion.
05:49With almost $4 billion of that tied directly to data centers.
05:54So who pays for all of this?
05:56Virginia just gave one answer.
05:59And it is a historic one.
06:01On July 1st, the nation's largest data center market became the first state in America to tax data centers on.
06:09Every kilowatt hour of electricity they consume.
06:13The new levy charges 1.1 cents per kilowatt hour.
06:17And it applies whether the power comes from the utility or from a company's own on-site generation.
06:24Budget analysts expect it to raise roughly $600 million a year for the states.
06:29General fund, with refunds owed if collections run over the cap.
06:35The tax is set to expire in mid-2028 unless lawmakers extend it.
06:41Notably, Virginia kept its sales tax exemption on data center equipment.
06:46A signal that the state still wants the industry.
06:49But is done giving away the power for free.
06:53Yet despite all the money and momentum.
06:56Communities are proving they can still win.
06:59In Hoffman Estates, Illinois, developer Karis Critical withdrew its rezoning petition for the Plum Farms Data Center just five days
07:09before the village board was set to vote.
07:12The retreat capped weeks of intense resident pushback.
07:16The plan commission voted 4-2 against the project in early June.
07:20After hundreds of residents from Hoffman Estates, South Barrington, and Barrington Hills packed the chamber to speak against it.
07:30A public records request added fuel to the fire.
07:33Revealing village officials had privately voiced support.
07:37And that the facility planned to run on natural gas by 2028 before switching to grid.
07:43Power.
07:44The developer says it may return with a fuller proposal someday.
07:49For now, the residents hold the field.
07:53But if local defeats are stinging the industry, the money certainly has not noticed.
07:59Data center operator Switch has kicked off a private funding round led by Andreessen Horowitz that
08:05could raise about $2 billion at a valuation approaching $50 billion including debt.
08:13Switch.
08:14Majority owned by Digital Bridge.
08:16Runs massive campuses in Nevada and beyond.
08:20And the raise lands in a year when big tech's spending on data centers is ballooning toward
08:25hundreds of billions of dollars.
08:28Think about the split screen this creates.
08:31Neighbors filing lawsuits over noise.
08:33Counties writing moratoriums.
08:36States inventing brand new taxes.
08:39And at the very same moment, some of the smartest capital in the world is paying near record
08:45prices for more data center capacity.
08:48Both sides are betting big.
08:50One of them is going to be wrong.
08:53Thanks for watching.
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