A.I. Data Centers Face a Rising Backlash

Resistance to A.I. Data Centers Widens as Water Fears and Permitting Fights Mount

The battle over the infrastructure powering the artificial-intelligence boom is escalating across the United States, with new evidence that many planned data centers are headed for some of the country’s driest regions, a first-of-its-kind statewide moratorium advancing in New York and a lawsuit in Utah seeking to halt a controversial project.

Together, the developments point to a shift in the politics of A.I. growth. What had largely been a patchwork of local disputes over noise, water use and power demand is becoming something larger: a state-level policy fight over who bears the environmental and economic costs of an industry racing to expand.

A new analysis published Sunday found that roughly two-thirds of planned U.S. A.I. data centers are slated for areas that ranked among the driest parts of the country over the past year. The findings arrive as drought remains widespread nationwide. According to Drought.gov, 58.38 percent of the lower 48 states was in drought as of June 2, with parts of Utah among the areas facing severe to exceptional conditions.

The collision between those two trends — worsening water stress and surging demand for computing capacity — is sharpening public scrutiny of the enormous facilities that train and run A.I. systems. Modern data centers can require vast amounts of electricity and, depending on their cooling systems, significant volumes of water.

New York Nears a Landmark Decision

In New York, lawmakers have moved to put the brakes on the industry, at least temporarily. The State Legislature last week approved the Responsible Data Center Development Act, which would impose a one-year moratorium on permits for new “hyperscale” data centers with a peak load above 20 megawatts. The bill now awaits a decision from Gov. Kathy Hochul.

If signed, it would make New York the first state in the country to enact a temporary statewide ban on large data centers of that kind.

The measure goes beyond a pause. It is part of a broader effort to regulate the sector more aggressively, including proposals for separate utility classifications, stronger environmental review, efficiency requirements and host-community benefits. Supporters say the goal is not to stop technology development altogether but to prevent utilities, residents and local governments from being overwhelmed by projects whose power and water demands can rival those of small cities.

The bill’s fate remains uncertain. As of Sunday, Ms. Hochul had not announced whether she would sign it. Recent reporting has suggested she has been wary of a blanket statewide moratorium even as she has expressed support for making large data centers shoulder more of the grid costs they impose.

That tension reflects a broader debate unfolding in many states: how to welcome investment from one of the fastest-growing sectors of the economy while avoiding higher electric bills, strained water systems and fast-tracked approvals that leave communities feeling sidelined.

A Utah Project Heads to Court

In Utah, opponents of the planned Stratos data center project have turned to the courts.

The Alliance for a Better Utah, a progressive nonprofit group, and five residents of Box Elder County filed suit on June 3 challenging approvals tied to the project, which has drawn attention in part because it is backed by the investor Kevin O’Leary, a star of “Shark Tank.” The plaintiffs are seeking to nullify actions taken by the Military Installation Development Authority and Box Elder County.

The lawsuit argues, in essence, that the public was denied meaningful input during a hurried approval process. County resolutions connected to the project were approved on May 4 after what critics described as a compressed review period and intense public response.

Mr. O’Leary has agreed to reduce the physical footprint of the project, but the concession has not quieted concerns. Residents and advocates have continued to raise alarms about potential health effects, air and noise pollution, water use and the precedent they say the development could set in a drought-stressed region.

The case could become an important test of how far local and quasi-governmental authorities can go in expediting major A.I.-related projects before courts step in.

The Costs of the A.I. Build-Out

The backlash comes at a moment when tech companies and developers are in a frantic race to secure land, power and cooling capacity for the next generation of computing. The boom has been fueled by the extraordinary energy demands of training large A.I. models and serving millions of users.

But the industry’s physical footprint has become harder to ignore.

Data centers can draw immense loads from electric grids, prompting concerns that households and small businesses could end up subsidizing upgrades needed to serve corporate campuses. In some places, backup diesel generation and increased truck traffic have raised air-quality worries. And in water-scarce regions, the use of evaporative cooling has become especially contentious.

That helps explain why the latest opposition is no longer confined to one-off neighborhood meetings or zoning-board skirmishes. In New York, lawmakers are trying to create a statewide framework before the build-out accelerates further. In Utah, residents are asking a judge to revisit a process they say moved too quickly. And nationally, the latest drought-linked analysis is likely to intensify questions about why so much of the industry’s planned expansion remains concentrated in parched areas.

What Comes Next

The immediate focus is on Albany, where Ms. Hochul’s decision could set a national precedent. A signature would not stop all data-center development, but it would send a powerful signal that states may be willing to pause projects until rules catch up with the industry’s speed and scale.

In Utah, the legal fight over Stratos could determine whether the project moves ahead as planned or faces delays and renewed review. It may also influence how other Western communities approach permitting for similar projects.

The broader question is whether developers will change course — by shifting projects to less drought-stressed regions, adopting less water-intensive cooling systems or offering stronger guarantees to host communities — before opposition hardens further.

For now, the message from residents, lawmakers and advocates is growing more pointed: the infrastructure behind the A.I. revolution may be digital, but its burdens are profoundly local.

Sources

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A.I. Data Centers Face a Rising Backlash