Microsoft-backed data center under fire over 62 unpermitted gas generators

A huge AI data center taking shape in Vineland, New Jersey, is drawing new scrutiny over how it has been powering part of the site. A recent visual investigation found 62 natural gas generators on the property, with at least 45 appearing to operate during a mid-August drone flight.

The New Jersey Department of Environmental Protection says it has issued no permits for power generators at the facility and has no generator permit applications under review. The agency is still gathering information, however, and has not yet announced a final compliance determination.

What investigators found at the site

The 300-megawatt facility is being developed by DataOne for Nebius, an AI infrastructure company. Thermal images published in August showed heat signatures from at least 45 of the 62 gas-powered generators installed at the partly completed campus.

State environmental officials had already seen natural gas power equipment during a July 29 inspection. After later questions about the generators, the department said it had requested more information from the facility before deciding whether the activity violated environmental requirements.

That distinction matters. The generators do not have state air permits, but regulators have not announced a final enforcement decision. A former Environmental Protection Agency air enforcement official told investigators that the equipment should have been permitted before operation and said he believed the activity violated federal law.

Microsoft’s link runs through Nebius

Microsoft does not own or operate the Vineland facility. DataOne owns and operates the site, while Nebius is the tenant responsible for installing and managing the servers and GPU infrastructure used for advanced AI computing.

Microsoft is connected through a major commercial agreement with Nebius. A September 2025 securities filing states that Nebius agreed to provide Microsoft with dedicated GPU capacity from the Vineland data center over five years, with service deployments scheduled for 2025 and 2026.

The filing put the contract value at about $17.4 billion through 2031. Microsoft can purchase additional services or capacity that could raise the total to about $19.4 billion. That relationship explains why the project is described as Microsoft-linked, even though Microsoft is not the site’s developer or operator.

The power plan has already changed

DataOne initially pursued a different on-site power design that used more than 30 gas-powered engines. Reporting based on public records indicates that state regulators found deficiencies in the air permit application, and DataOne withdrew it in May.

The project has since shifted toward Bloom Energy fuel cells to support the 300-megawatt facility. Fuel cells generate electricity through an electrochemical process rather than by combustion, and Nebius says the system is intended to supply power on-site without drawing electricity from the regional grid.

Vineland’s Planning Board approved the second phase of the plan on Aug. 18. The approval allows the project to move ahead with the fuel-cell power system and related infrastructure, but it does not resolve separate questions about permits required for equipment already in place or operating at the property.

The LNG tank brought another stop order

The revised power plan also includes a 1.5-million-gallon liquefied natural gas storage tank. Project representatives have said the tank would provide a backup fuel supply if service from the site’s natural gas pipeline were interrupted.

Before the Planning Board approved the revised plan, Vineland issued stop-construction orders covering work involving the LNG tank and Bloom Energy fuel-cell equipment. Local reporting said construction or equipment placement work had begun before the required local approvals were in place.

DataOne said the notices involved limited equipment placement and that it did not expect the temporary pause to change its delivery schedule. The Planning Board later approved the revised site plan, but other state and local permits may still be required before parts of the energy system can operate.

Noise complaints have reached court

Residents near the Vineland site raised noise concerns before the generator investigation. Neighbors described a persistent industrial hum, especially at night, and residents have already taken their complaints to court.

A lawsuit alleges DataOne’s noise interfered with residents’ use of their homes, while court filings cite a county-issued nighttime-noise violation. The case remains unresolved, and sound-reduction efforts continue at the site.

Community concerns started months earlier

Questions about transparency were already visible at a January town hall in Vineland. More than 100 residents attended as DataOne representatives explained the project’s expected water use, power system, environmental impact, and economic benefits.

By then, part of the data center had already been built, and construction was continuing. Some residents argued that the public discussion came too late, while DataOne’s leadership said the company planned to address concerns and operate differently from conventional data centers.

The project has continued to evolve since that meeting. Its power design changed, the Planning Board reviewed a revised second phase, and residents kept pressing officials on noise, water, emissions, and permitting. That history helps explain why the generator findings drew a strong response.

Microsoft’s promises meet a regulatory test

Microsoft announced a Community-First AI Infrastructure initiative in January, promising to address electricity costs, water use, jobs, taxes, and community investment around data centers that Microsoft builds, owns, and operates. Environmental groups argue that Microsoft’s long-term Nebius contract still gives it influence over the Vineland project.

There is an important limit to that argument. Microsoft’s initiative specifically describes its own data centers, while Vineland is owned and operated by DataOne and leased to Nebius. Microsoft declined to comment on the recent generator investigation, while DataOne said it remains committed to meeting applicable environmental and permitting requirements.

The immediate regulatory question now sits with New Jersey environmental officials. The department has confirmed the absence of generator permits and requested more information. Until it completes its compliance review, the strongest legal conclusions remain unresolved, while residents continue to watch the temporary generators, noise issues, and the transition to the planned fuel-cell system.

TL;DR:

• Investigators counted 62 gas generators at the Vineland data center and found at least 45 that appeared to be operating during a mid-August thermal drone flight.
• New Jersey environmental officials say no power-generator permits have been issued for the site, but the agency has not yet announced a final compliance determination.
• DataOne owns and operates the facility; Nebius is the tenant; and Microsoft has a five-year contract for dedicated GPU capacity at the Vineland site.
• Vineland issued stop-construction orders involving a planned 1.5-million-gallon LNG tank and Bloom Energy fuel cells before approving the project’s revised second phase.
• Noise complaints, permitting questions, and community concerns remain active as regulators review the generators and the project moves toward its planned long-term power system.

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This article was made with AI assistance and human editing.