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Panel of tech analysts points to a U.S. map on a screen, highlighting California’s drought zones and alternative sites.

Editorial illustration for Data Centers Face Water Crunch: Experts Urge California Expansion Rethink

Data Centers Face Water Crisis in California Tech Hub

Experts advise locating new US data centers outside water-stressed California

Updated: 3 min read

California is running out of water. Yet it’s racing to build more data centers. These two facts are now crashing headlong into each other.

Experts are telling the state to stop. Consider a single large server farm: it can gulp millions of gallons daily just for cooling. Reservoirs are perilously low.

Aquifers are being drained. Every new facility is a bet against the climate. Recent analysis shows the environmental calculus for building there is turning dire.

The industry’s physical needs have slammed into a hard, hydrological wall.

Conversely, California's long-running water issues may cause a problem if data centers keep expanding there. (In October, Governor Gavin Newsom vetoed a bill that would have required data center operators to disclose how much water they use, claiming that the state is "well positioned to support the development" of data centers.) Data center operators choose locations based on a variety of factors, including energy and water needs. But they're not the only inputs: Arizona, which has more than 160 data centers, is named in the analysis as one of the states facing "severe water scarcity issues." The industry has no plans to move out of some of their favored areas: There are still massive projects planned for Virginia, including a $9 billion investment from Google announced in August.

Governor Newsom’s veto of the disclosure bill speaks volumes. His stated confidence feels divorced from reality. It’s a choice not to know.

Operators get a free pass while local water tables pay. Analysts are blunt: build elsewhere. They point to Arizona, already home to over 160 centers, as one alternative.

But it too faces severe scarcity. This isn’t about finding a perfect host. It’s about avoiding the worst ones.

California is increasingly on that list. Water is now a non-negotiable factor, as critical as power. Companies eyeing long-term stability will study their maps with new urgency.

California’s gamble assumes the water will come, or that the political will to find it will appear. Both are uncertain. The state is betting its tech future on a resource that’s already vanishing.

Common Questions Answered

How are data centers impacting California's water resources?

Data centers are placing significant strain on California's already limited water supply, creating potential environmental challenges for the state's tech infrastructure. The growing demand from tech companies is exacerbating existing water scarcity issues, prompting experts to urge a reconsideration of data center expansion strategies.

What did Governor Gavin Newsom do regarding data center water usage transparency?

In October, Governor Newsom vetoed a bill that would have required data center operators to disclose their water consumption, claiming California is well-positioned to support data center development. His veto effectively prevents mandatory reporting of water usage by data center facilities in the state.

Why are experts recommending data centers relocate from California?

Experts are urging data centers to move outside water-stressed regions like California due to the increasing water scarcity and potential long-term environmental constraints. The growing tech infrastructure is creating unsustainable pressure on the state's limited water resources, making alternative locations more viable for future data center development.

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