Rural Tennessee town puts AI data center on hold as water and power fears grow

McMinnville, a rural Tennessee city, has put a proposed AI-related data center on hold after residents warned it could strain local water and electricity resources.

Opposition has also grown online, with a petition against the project closing in on 3,000 signatures as the fight spreads beyond City Hall.

What happened?

City officials recently enacted an 18-month moratorium on new data centers, putting the proposed Hixson Data Center on pause while McMinnville evaluates its potential effects.

According to WSMV, the proposal calls for a 96,000-square-foot, 25-megawatt facility built to support Nvidia's GB200 NVL72 AI supercomputing platform.

The project would be McMinnville's second data center if it ultimately wins approval.

The moratorium takes effect immediately and stops the "acceptance, processing, and approval of applications for land use, zoning, building, site plan, or conditional use permits for data centers and high-density computing systems."

Community organizers had asked the city to adopt a 12-month pause to give residents time to study the proposal's longer-term effects.

Instead, officials approved an 18-month moratorium and said future proposals would need studies addressing infrastructure, environmental effects, sound, and utilities.

Why does it matter?

Data centers are becoming one of the biggest flashpoints in the AI boom.

These facilities power everything from chatbots to advanced computing tools. AI can bring real benefits, including helping utilities forecast electricity demand, improving grid efficiency, and better integrating wind and solar power.

Still, the tradeoffs are hard to ignore, especially in smaller communities.

Large AI data centers can consume enormous amounts of electricity and water, potentially straining local infrastructure or pushing utilities to expand generation.

Per DatacenterDynamics, the developer is still trying to line up financing and secure a tenant, and the project could be finished in the first quarter of 2028 if it goes forward.

For now, the town has decided it wants more answers before allowing the process to continue.

What are people saying?

Much of the concern from residents and local officials has centered on environmental questions, especially whether the project could affect water supply and power demand.

WSMV reported that no one representing the Hixson Data Center attended the meeting, leaving many of the community's biggest questions unresolved for now.

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