Federal panel halts first AI data center approved on US public land

An administrative judge with the Interior Board of Land Appeals has issued a stay halting construction of what would have been one of the first artificial intelligence data centers built on federal public land in the United States, ruling the project is likely to have been approved unlawfully.

The stay, issued September 1, 2026, applies to the Townsite Data Center, an 88.5-acre facility the Bureau of Land Management approved on public land roughly 25 miles southeast of Las Vegas, near Boulder City, Nevada. Townsite Solar 2 LLC originally received federal approval in 2023 to build a solar power and battery storage facility on the parcel. In 2025 the company asked BLM to amend its right-of-way grant to build a data center on the same land instead, and BLM approved the change in June 2026.

The board found BLM likely acted unlawfully when it approved the change without a project-specific environmental review, treating the data center as substantially the same use as the solar project it was replacing. Boulder City’s city attorney, Brittany Walker, said BLM “essentially, sweepingly, approved a new land use without following processes in federal law.”

Boulder City and the Center for Biological Diversity filed separate appeals against BLM’s approval; the board consolidated the two, expedited them, and ordered BLM to respond by September 21, 2026.

Opponents cited the data center’s projected electricity and water demand, construction-related soil disruption, light pollution and habitat loss for the Mojave desert tortoise, a species listed as threatened under the Endangered Species Act. Boulder City’s Planning Commission had already voted in May 2026 against allowing data centers under the city’s land-use rules, and residents rallied against the project in April 2026. A local resident, Brynn deLorimier, started a petition against the project that drew more than 6,200 signatures, and a group of residents including deLorimier filed a citizens’ initiative asking the city to require voter approval before any future data center is approved within Boulder City limits. DeLorimier has said she worries the facility’s waste heat would collect in the valley surrounding Boulder City: “If you look around, there’s mountains in every direction. So this is a little basin. So we are worried that heat would just stay here and bake our town.”

“This tremendous victory proves communities have the power to fight back and win,” said Patrick Donnelly of the Center for Biological Diversity.

Olivia Tanager of the Sierra Club’s Toiyabe chapter called the ruling “a victory for democracy and public participation.”

The Townsite approval came as the Trump administration has pushed to open federal land to data center construction under an AI Action Plan published in 2025. The Department of Energy identified 16 federal sites for potential AI infrastructure that April, then selected four in July 2025 for data center development: the Idaho National Laboratory, the Oak Ridge Reservation in Tennessee, the Paducah Gaseous Diffusion Plant in Kentucky and the Savannah River Site in South Carolina. The Townsite project was not among those four; it was approved separately by BLM outside that site-selection process. The September 1 stay marks the first time regulators have halted a data center project on public land before construction began.