Nonprofit sues to block $165 billion OpenAI data center in rural New Mexico

(CN) — A community advocacy group sued New Mexico’s second most populous county Friday over the approval of a $165 billion AI data center it says violates state law.

The Doña Ana County Board of Commissioners approved three new ordinances in September and October to fund the OpenAI-backed Project Jupiter, a development that began construction last week in Santa Teresa, New Mexico. According to the project’s application for an industrial revenue bond, the project will be the largest AI facility in the state, comprising at least four data centers, microgrid facilities, natural gas power plants, a battery storage center and a desalination plant to use brackish groundwater to cool its servers.

Pointing to flaws and omissions in its application, the nonprofit Empowerment Congress says the commissioners violated state law by approving funding for the project and asks that a state judge review and overturn the decision.

“Petitioners have a significant interest in their local governing body following its own rules, as well as state law,” the nonprofit wrote in a complaint filed Friday.

The county can grant an industrial revenue bond only “after the county has been fully informed concerning the applicant and its current status and future plans," according to Doña Ana County Code § 56-8.А. From the application, the county must consider: new employment opportunities projected by the project, the proposed increase in the county’s tax base, the projected strengthening of the county as a center of commerce, and the extent to which the project will provide for public health, safety and welfare.

The plaintiffs say the Project Jupiter’s application adequately addresses none of those criteria.

In a Sept. 19 meeting, in which two of the three ordinances were passed, Board Commissioner and Vice Chair Susana Chaparro noted the board was given less than two weeks to review the application’s hundreds of pages, many of which were missing or blank.

“The application the board relied on to adopt the IRB ordinance is incomplete and does not provide enough information, supporting materials, or evidence required for the board to properly apply the four criteria and make a fully informed decision, as required by the Doña Ana County Code,” the plaintiff says in the complaint.

Chief among the plaintiff’s concerns is the fourth criteria regarding public health. Though the applicants say Project Jupiter will use a closed-loop liquid cooling system to conserve water in the arid Southwest, the plaintiffs point out that the plant will still require an initial fill-up of at least 10 million gallons and will likely still use millions more to generate power after the two-year construction period. Additionally, they say the plant, which will cover at least 1,400 acres and be within two miles of residences and three miles of Santa Teresa High School, will release more than 40 million tons of greenhouse gasses per year, including sulfur oxide, nitrogen oxide, carbon monoxide and ammonia.

“To the extent environmental assessments are required, the applicant expects to complete within the next six months,” says the IRB application.

The plaintiffs say that isn’t good enough.

“Unless and until all environmental assessments are completed, finalized and include sufficient documentation and supporting evidence demonstrating that Project Jupiter will not be a significant threat to public health, safety and welfare, the county cannot properly evaluate the fourth criteria and make a fully informed decision,” the nonprofit wrote in a public comment submitted to the board before the vote.

Alongside the revenue bond, ordinance 367-2025, the county board of commissioners approved two ordinances, 368-2025 and 369-2025, granting funding under the state’s Local Economic Development Act. Because the applicants didn’t file a request for LEDA funding, the board instead used the apparently complete IRB application, which the plaintiffs say violates state law and the county code.

The Local Economic Development Act applies only to the following: “entities that will manufacture, process, assemble, store, warehouse, distribute, or sell products; or are a tribal nation or pueblo; telecommunications sales enterprise; farmers’ market; metropolitan redevelopment project; cultural facility; or retail business.”

“The board’s adoption of the ordinances is contrary to law because the proposed project is not a qualifying entity under the Act,” the plaintiffs say.

The plaintiffs ask that a state judge grant judicial review of the board’s decision and reverse it on appeal. Alternatively, they ask for a ruling declaring the board’s decisions in violation of state law.

The board of commissioners hasn’t replied to a request for comment.

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