Public opposition is growing over a planned $1.8 billion artificial intelligence data center in Kenilworth, New Jersey, even as construction on the project moves ahead.

Now, News 12 reports state lawmakers are also targeting one of the financial incentives tied to the development, adding a new layer of pressure to a debate that reaches beyond a single borough.

What's Happening?

Demonstrators gathered outside Kenilworth Borough Hall ahead of Tuesday's planning board meeting, where residents and other opponents protested the massive AI data center planned for the Northeast Science and Technology Center, News 12 reported.

CoreWeave acquired a large parcel at the site for a planned 400,000-square-foot facility valued at $1.8 billion, and Kenilworth's planning board approved redevelopment last year, the outlet noted. Construction is already underway.

News 12 previously reported that some residents said they were never notified about the project. In recent weeks, meetings have grown increasingly tense as people from Kenilworth and nearby communities raised concerns about noise and environmental impacts.

At the same time, Assemblyman Andrew Macurdy, Assemblyman Balvir Singh, and state Sen. Joe Cryan said they plan to introduce legislation to end the state's AI data center tax credit, News 12 reported. 

The incentive surfaced in 2024 under former Gov. Phil Murphy, and the lawmakers say the Kenilworth project received $250 million from it, per News 12.

Why Does It Matter?

The dispute in Kenilworth reflects a broader challenge facing communities across the country. Municipalities are grappling with how to respond to the rapid expansion of AI infrastructure when residents are worried about quality-of-life impacts and rising energy demand.

AI can offer meaningful benefits. It can help utilities and businesses better manage power use, improve grid efficiency, and support renewable energy systems. But the computing power behind AI tools also requires enormous server capacity, which can consume large amounts of electricity and water for cooling.

That can strain local infrastructure and raise concerns about pollution, resource use, security, misuse, and even higher utility bills.

Opponents are continuing to show up at public meetings and demonstrations, even though the site has already been approved for redevelopment and construction has begun.

What's Being Done?

On the policy side, the proposed legislation would end the state's AI data center tax credit. If it passes, the remaining funds allocated to the program would be redirected toward lowering electricity rates and supporting solar and energy storage efforts.

The proposal would move public money away from attracting large AI facilities and instead toward reducing electricity rates and backing solar and energy storage efforts.

The Kenilworth project appears to be moving ahead, but public resistance has not cooled. With construction underway and a battle brewing over tax breaks, the future for AI data centers in the state is far from settled. 

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