The fine against DataOne is the biggest New Jersey regulators have imposed on a data center. The generators were being used at the company's Vineland complex, a large computing facility about 40 miles from Philadelphia that is expected to support Microsoft's growing demand for AI capacity through its $17 billion arrangement with infrastructure provider Nebius.

The Guardian writes that the equipment apparently wasn't present when environmental officials inspected the property in December. By July, however, regulators found the generators at the site. Independent reporting later used thermal-drone footage to show that 45 of the facility's 62 generators appeared to be operating.

That raised a significant permitting issue because the state had not authorized the generators under its air-quality program. The units produce emissions that can contribute to harmful air pollution, particularly when large numbers are operated simultaneously.

DataOne has now been given 45 days to bring the equipment into compliance by applying for the appropriate permits. If it fails to do so, the company could be forced to stop using the generators. For now, New Jersey is permitting them to continue operating while that process plays out.

The decision has frustrated some environmental advocates, who argue that the financial penalty is relatively small compared with the scale of the project.

They have also questioned why operations were allowed to continue after regulators determined the required approvals were missing.

The controversy adds to earlier friction surrounding the Vineland development, including complaints from nearby residents about noise and disputes over construction and zoning.

DataOne says the generators were only intended as an interim source of electricity and disputes the state's interpretation of the permitting requirements. Nevertheless, the company says it will submit the necessary applications while moving ahead with plans to replace the generators with quieter, lower-emission fuel cells.