The Atlanta film studio that produced Marvel’s “Loki” and “Cocaine Bear” is ready to break into the data center business, but it’s meeting resistance at every turn.

Shadowbox Studios, backed by private equity giant Silver Lake and hedge fund firm Commonwealth Asset Management, wants to construct an up-to-651-megawatt data center in Georgia’s DeKalb County where it had once planned to build a sprawling complex of sound stages. For over a year the county has been trying to solve a problem on the minds of local leaders across the country: how to regulate new data centers.

That question came to a head this week over a proposal to classify the facilities and effectively ban the largest cloud-computing providers. Peter Rumbold, Shadowbox’s chief executive officer, spoke in favor of regulation, although he balked at size restrictions, according to a report from Decaturish. After the meeting, a vote on the resolution was tabled until November. It’s the latest tripwire in a legal dispute that’s left Shadowbox’s plan on hold.

The studio is struggling to come to grips with an entertainment-industry slowdown. In 2026, Georgia film and TV production spending hit a 10-year low. Competition from international locales that offer regional tax credits and cheaper labor, paired with the embrace of short-form content and generative artificial intelligence tools, have amplified a wave of industry consolidation that’s left even Hollywood struggling.

Studios are finding creative solutions, transforming sound stages into pickleball courts, bat mitzvah and concert venues. Some are turning to data centers that feed the massive power needs of AI.

“This issue of data centers is the issue of the century,” said Ted Terry, commissioner of Super District 6, which includes South DeKalb, where the project would be located. “I’ve only been in elected office for 13 years and I’ve never seen so much public engagement, public concern.”

Shadowbox says a data center is the most lucrative use of the land for the studio and community. However, a recently extended county-wide moratorium has caught the plan in the crossfire. Shadowbox is suing the county, saying it was told the project could proceed prior to the freeze. Its lawyers are also fighting a September rejection of an attempt to revise its 2022 land disturbance permit.

To lift the moratorium, the county needs to establish zoning regulations and conduct an environmental impact study. But first it needs to decide what even constitutes a data center. Rumbold supported regulation, but took issue with a proposed ban on data centers above one million square feet, considering Shadowbox’s 1.1 million-square-foot plan. Some residents are pushing for an even more restrictive definition before the proposal goes before the community board in November.

Silver screen

The original plan for a studio expansion was backed by a $500 million investment from Silver Lake. But it came at the height of a tax-incentive-fueled film boom that drove Atlanta’s inventory of sound stages to nearly double between 2020 and 2026, according to the Georgia Film Office.

“There would be two or three different movies being made at the same time,” said Tom Harrold, a film-industry lobbyist who helped create the state’s film tax credit. “But those days are over.”

Instead, the AI boom has set off a global race to build data centers. Such sites can power generative AI tools like ChatGPT or Claude, but they’re also key to storing everything from photos and videos to text messages. They run websites and email services and help video-streaming services deliver content.

Shadowbox-investor Silver Lake has many ties to the AI buildout, including a generative AI film and animation studio. The private equity giant also has stakes in Vantage Data Centers, one of the largest hyperscale data center operators, as well as Dell Technologies Inc., which supplies servers, and chipmaker Altera.

Silver Lake didn’t immediately respond to a request for comment.

In Georgia, Shadowbox has yet to secure a data center tenant, so it’s unclear whether the facility would be for AI or more conventional cloud computing, though the projected power usage is on par with much of the country’s largest AI facilities.

The data center will bring in 275 permanent jobs and generate more than $130 million in tax revenue, according to Shadowbox. Residents argue a data center will do little to uplift the community while reneging on promises of more than 2,000 permanent jobs the now-shelved studio plan was supposed to add.

Dumping grounds

The majority-Black community “has unfortunately been dumped on for industrial development,” with residents fighting against plans for a biomass plant, asphalt factory, landfill and AI-enabled police training complex, according to South DeKalb resident Gina Mangham.

“We’re tired of that kind of development coming to our communities,” said Mangham, who would prefer improved amenities, like grocery stores or restaurants, in the area. She leads a community group that opposes Shadowbox’s proposal and wants to cap new facilities at about 100,000 square feet.

Shadowbox would consider a community benefits agreement addressing concerns, a spokesperson said, adding the data center would use a closed-loop cooling system with no material impact on municipal water supplies.

In November, the data center fight will be taken to the polls across Georgia. More than 40 local moratoriums and related restrictions are in force across the state while a recent survey from a nonprofit advocacy group found 83% of residents support a temporary statewide pause.

As Shadowbox’s lawsuit moves to Superior Court, the case may hinge on whether the assurances the studio received prove it has vested rights to develop under Georgia’s law, said Dave Fagundes, a real estate scholar at Emory University.

“It’s a real close argument,” he said. “But I don’t think it’s a slam dunk.”

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