AI Giants Warn Illinois Law Could Push Data Centers Out

Artificial intelligence companies are warning Illinois lawmakers that the state risks losing billions of dollars in data center investment unless it loosens the nation’s toughest biometric privacy law — a threat that’s colliding with deep skepticism from labor unions, environmentalists and suburban communities.

At the center of the fight is Illinois’ Biometric Information Privacy Act, or BIPA, a 2008 law that gives individuals the right to sue companies for improperly collecting or using biometric data such as facial images, fingerprints or retina scans. The Chicago Tribune reported that industry groups argue the statute creates unlimited legal exposure for AI-driven data centers, which increasingly rely on biometric data to train algorithms and power everything from facial recognition to targeted advertising.

“You’re seeing billions of dollars of investment that Illinois is just not even in the running for,” said Brad Tietz, state policy director for the Data Center Coalition, whose members include Amazon, Google, Microsoft and Meta.

In Indiana, for instance, Amazon is spending $26 billion on a massive cluster of AI data centers near South Bend, while Wisconsin and Indiana are rapidly outpacing Illinois in planned hyperscale projects. Illinois currently has 108 data centers of all sizes, nearly twice as many as Indiana and Wisconsin combined, according to Baxtel data cited by the publication. But looking ahead, Indiana has 37 large-scale projects planned or under construction, compared with just five in Illinois through 2032.

Developers say BIPA is a key reason. Unlike other states, Illinois allows private lawsuits and statutory damages for biometric violations, and companies could be liable each time a person’s image or data is reused for a new purpose, according to the outlet. Since 2020, Meta, Google and TikTok’s parent have paid a combined $842 million to settle Illinois privacy claims.

Opposition to changing the law is fierce. Trial lawyers call BIPA a critical civil rights safeguard. Environmental groups want stricter rules on data center power consumption, water use and diesel backup generators. Local officials, meanwhile, are facing resident backlash over noise, traffic and infrastructure strain.

Those tensions are already playing out on the ground in the Chicago suburbs. Aurora enacted a temporary moratorium on new data centers last fall after noise complaints, while Naperville’s City Council rejected a proposed 145,000-square-foot facility in January. DeKalb County, by contrast, has approved nearly 3 million square feet of data center space tied to Meta and other tech giants, though additional projects there are now on hold amid power constraints and legal uncertainty.

Environmental advocates recently introduced the Power Act, which would raise electricity rates for large data center users and restrict where facilities can be built. Industry groups warn the bill would make Illinois an even bigger outlier.

— Eric Weilbacher