CubCloud AI Challenges Missoula Data Center Zoning Rules

CubCloud AI has filed a lawsuit challenging Missoula’s zoning restrictions on data centers.

The Missoula-based company alleges that the city’s 2025 zoning amendment violates Montana’s Right to Compute Act, a law designed to protect computational infrastructure from excessive government regulation. This legal dispute highlights the tension between local land-use authority and emerging state-level protections for data center development.

CubCloud AI, supported by the Arizona-based Goldwater Institute through the Big Sky Legal Project, contends the ordinance is neither supported by a compelling governmental interest nor narrowly tailored as required by the Act. The amendment redefines data centers based on equipment use rather than floor area, tightening restrictions compared to previous rules that allowed data centers occupying less than 50 percent of a facility. The company’s existing facility complied under the old zoning because its computational resources took up about 20 percent of the space. Missoula City Attorney Ryan Sudbury has stated the city will defend the zoning change if served, while City Council Member Kristen Jordan is preparing a proposal for a two-year moratorium on data center development in heavy industrial zones.

The lawsuit was filed on November 4, and the city’s response remains forthcoming.

Data center siting in Montana may involve challenges as local governments weigh infrastructure demands and environmental impacts. If CubCloud AI prevails, it may reshape how Montana communities regulate emerging digital infrastructure amid competing economic and environmental priorities.

Missoula AI company sues city over data center restrictions 
By Katie Fairbanks, Montana Free Press