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The way they see it, an obscure law passed in 2008, known as the Biometric Information Privacy Act, is keeping them from cashing in on the biggest wave of growth the industry has ever seen. Artificial intelligence, particularly the type of software behind ChatGPT and other chatbots, has led to an explosion in data center construction. Real estate services firm Jones Lang LaSalle estimates the amount of data center construction that could break ground or be completed in the next five years across North America will more than double from the previous five years.
As the nation's third-largest city, Chicago has long been one of the top markets for data centers, but it's losing ground because of fears that BIPA could leave AI companies vulnerable to costly class-action lawsuits if they gather or use biometric information without consent in operating or training in their software. The shift threatens Chicago's status and could cost the city thousands of jobs and billions in investment at a time when construction activity is weakening.
"(BIPA) is causing a pause in the state of Illinois by cloud providers and those with AI investment," says Dan Diorio, vice president of state policy for the Data Center Coalition, a trade group that represents data center operators, including Amazon, Cyrus One, Digital Realty, Equinix, Google, Meta, Microsoft, Prologis and T5. "We have developments that are a bit stalled."
Data center developers say some of the biggest projects are bypassing Illinois for Indiana, Iowa, Michigan and Wisconsin.
"You're probably seeing north of $100 billion of projects that have gone directly over the border to other states," says Andy Cvengros, an executive managing director at JLL. "Hyperscalers all but killed everything that they were planning to do here in Illinois in favor of going elsewhere. Big AI leases have gone elsewhere."
One frequently cited example is Amazon's $11 billion data center complex under construction near South Bend, Ind.
"No single issue determines our investment decisions, and we are constantly evaluating new locations based on a wide range of factors," Amazon said in a statement.
The company also is spending $20 billion on a data center buildout in Pennsylvania as well as $10 billion campus in North Carolina.
Indiana says it racked up nearly $15 billion in data center projects last year, including the Amazon campus, a Google facility in Fort Wayne and a Microsoft project in LaPorte. Microsoft announced a $3.3 billion data center campus in Mount Pleasant, Wis., west of Racine. Vantage Data Centers is building an $8 billion data center campus in Port Washington, north of Milwaukee.
Microsoft declined to comment, and Google did not respond to a request for comment.
Chicago ranked second or third in North America for total data center capacity available between 2017 and 2022, according to JLL. Last year, it had fallen to fifth. Through the first half of 2025, it's down to seventh.
The pipeline in Chicago also is showing signs of weakness.
"Nearly 80% of new development projects nationally are pre-leased," Cvengros says. "When you look at what's coming to market in Chicago in 2026, you have several projects that are not pre-leased."
JLL's data only includes co- location data centers, or those that rent space to multiple tenants, not the projects that so-called hyperscale users such as Amazon, Google, Microsoft and Meta are building themselves. Those are the projects most prized by developers, labor unions and local governments.
Data centers will continue to get built in Chicago because technology companies, from cloud-storage vendors to software providers, need to be close to customers for redundancy. Many applications don't involve biometric data, such as people's fingerprints, photos, videos or voices. But such information is a core component to artificial intelligence, which is driving much of the growth in data centers.
"Illinois has a rare advantage: an abundance of power and 10 gigawatts of surplus clean energy, which right now is being exported to neighboring states supplying data centers that deliver jobs, economic development and new tax revenues to those states," says Curt Bailey, president of Related Midwest, which is pursuing data centers for its Quantum Shore development on the former U.S. Steel South Works site in Chicago as well as other projects throughout the state.
"We have policies in place that, while well-intended, unfortunately preclude our ability to keep that surplus energy here and attract data centers and economic development to Illinois," Bailey said. "The conversation we need to be having is how to position Illinois for future growth."
Developers and data center operators say that means tackling BIPA, but privacy advocates say the law isn't the problem.
"BIPA has been attacked for all kinds of reasons," says Ed Yohnka, spokesman for the ACLU of Illinois. "Long-term opponents have found a new coercive argument to weaken BIPA, which is, 'Oh, you'll lose out on all these data centers.' "
Labor sees jobs
The data centers used for AI are far larger than their predecessors, costing billions and using five to 10 times the amount of power as their predecessors. At a time when commercial construction has been slowed by a post-pandemic glut of office space, elevated interest rates, and slow population and economic growth in Chicago, unions and real estate developers have become bullish on data centers.
"We have three tower cranes up right now in Chicago," says Don Finn, business manager for the International Brotherhood of Electrical Workers Local 134, which hosted the South Side event several weeks ago to talk about BIPA and data centers. "We should have 20 to 30. Five or six years ago, we had 60 cranes up."
Electricians are crucial to data centers, which consume massive amounts of power. "Our members are definitely looking for the work," Finn says.
He estimates close to half the work for his members this year will come from data centers. Just a few years ago, the number was closer to 20%.
"BIPA is the animal in the room," Finn says. "We all know it. Let's have a conversation about it."
The AFL-CIO says it's also onboard. The union says it "looks forward to working with our affiliates, the data center industry and state policymakers to ensure Illinois is the preferred destination for data center development."
Local governments also see data centers as an attractive source of revenue, as well as jobs, at a time when municipal budgets are under strain.
Three developers are seeking approval for large data center projects in Yorkville that local officials say could generate tens of millions of dollars in property taxes. But there's no guarantee they will get built.
"It's a massive economic benefit: The property taxes to school district are massive, but they generate no students and there's not a lot of traffic," Yorkville City Administrator Bart Olson says. "It's an ideal mix when you're looking at land uses in the town."
He points to DeKalb, where Meta, the parent company of Facebook, built a $1 billion data center two years ago, taking advantage of a beefed-up state tax credit for data centers. It brought an extra $31 million in taxes to the city and school district last year.
"It's been transformational," says Bill Nicklas, DeKalb's city manager.
Meta opened the first of five planned buildings in 2023. The company declined to comment on its plans to build out the campus, but Nicklas says, "They're certainly aware of where this matter is in Illinois and have made decisions based on that knowledge."
Competing interests
While developers and data center operators enlist a powerful political ally in unions, they face formidable opposition from trial lawyers and privacy advocates in the battle to convince legislators to change BIPA.
"BIPA is the firewall that protects the privacy rights for Illinois workers and consumers against corporate misuse of biometric information," says Timothy Cavanagh, president of the Illinois Trial Lawyers Association. "BIPA was significantly changed just two years ago. ITLA does not see the need for further changes."
Illinois was the first state to pass a biometric privacy law in 2008, requiring individual consent before photographs, fingerprints or other biometric information is collected, transmitted or stored. It didn't attract much attention until 2017, when a Long Grove family sued Great America, the amusement park in Gurnee, for scanning their son's fingerprint without his consent during a school field trip.
Eventually, restaurants, including White Castle, were sued for not getting permission from employees to collect their fingerprints when they clocked into work. Tech companies Facebook and Google were sued and paid hundreds of millions each for cataloging users' photographs with facial recognition without their permission.
The law was open-ended, allowing companies to be fined $1,000 to $5,000 for each violation. White Castle feared it faced fines for each swipe of a finger by employees at its Illinois restaurants that could total $17 billion. The Illinois Supreme Court urged the Legislature to clarify the statute, which it did by limiting damages to each employee, rather than each instance of collecting biometric information.
Two years ago, data center operators started being sued for violating BIPA, Diorio says.
In one case, Amazon Web Services was sued in federal court by a Jewel-Osco employee who alleged facial scans used in conjunction with temperature scans during the COVID-19 pandemic were used without proper consent, court records show. AWS provided hosting services to the maker of the software, but the plaintiff claimed Amazon also used the images collected by the customer to improve its own artificial intelligence software for facial recognition. The plaintiff, who had sought class-action status, recently voluntarily dismissed the case.
"With regard to the data centers themselves, they shouldn't be impacted by the law. What the law requires is notice and consent for collection of biometrics," said the ACLU of Illinois' Yohnka. "If they store information for third parties, they don't take an active step in collecting it.
"If (lawmakers) adopt legislation to exempt data centers, it's an invitation for them to become a big storage location for our biometric information," he added. "The idea that because there are large corporate interests involved that your biometric information should be less protected is not a notion that was contemplated under the law."
Many of the largest data center operators — including Amazon, Google, Microsoft — sell cloud- computing services but also are AI companies.
Data center companies haven't said exactly how they'd fix BIPA. But they point to Texas, which also has a biometric privacy statute and in June adopted a specific AI law that requires intentional violation for liability, only allows the government to enforce the statute and limits liability from third-party misuse of AI systems.
"There's no intent to undermine the spirit of BIPA or provide a carve-out or anything like that," says Diorio, who represents the Data Center Coalition. "It's just about clarifying how new technologies work within a law that was passed in 2008."
The group is still trying to come up with a concrete proposal for legislators. "We need to know exactly what they're looking for," Finn says.
It's not the first time technology companies have tried to change BIPA. Several years ago, Google sought to create an exclusion for photos. They tried again when fines were addressed and again last year in connection with energy legislation. It's always a high-wire act.
"BIPA is something a lot of people in Illinois are proud of," says Sen. Bill Cunningham, D- Chicago, who played a key role in amending the law two years ago. "People want to see their biometric information protected. The counter argument is it needs to be updated in light of the dramatic changes in technology that have taken place since 2008.
"I have concerns from a business standpoint that it will slow economic growth," he adds.
How far legislators are willing to go to keep Illinois in the game is the key question.
"Some sort of clarification is in the realm of possibility in Springfield," Cunningham says. "There's another ask that's a much heavier lift: that's an exemption related to AI."
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