Experts advise locating new US data centers outside water‑stressed California
Some experts are already sounding the alarm that the next wave of U.S. data-center construction could hit a resource snag if planners keep staring at California. The state’s long-standing water shortage seems to make it a risky spot for power-hungry sites that depend on cooling towers and humidifiers.
A research brief that just came out - “If the US Has to Build Data Centers, Here’s Where They Should Go” - actually suggests looking at states with more plentiful water supplies. The timing feels a bit tense: back in October Governor Gavin Newsom shot down a bill that would have forced operators to disclose their water use, saying California is “well positioned to support the…” , a comment that highlights a clear policy gap around transparency. Companies are now juggling expansion plans against growing sustainability concerns.
It’s unclear whether California can handle another surge of data-center footprints without making its water woes even worse, but the pressure to find alternatives is definitely mounting.
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.
Most analysts think the next wave of US data centers will pop up outside California, where water shortages could bite. Meta has said it will pour about $600 billion into domestic infrastructure by 2028, and OpenAI already set aside roughly $1.4 trillion for similar builds. A new study maps the environmental footprint of those facilities and flags the pressure on local resources.
California’s chronic water woes still loom; Governor Gavin Newsom vetoed a bill that would have forced operators to report water use, saying the state can still back the industry. Without clear numbers, it’s hard to gauge the real impact. Some policymakers might offer incentives to regions with plenty of water.
If a state can promise cheaper power and steady water, it could look more appealing to firms juggling performance and sustainability. The sector’s growth seems to outpace current reporting rules, so regulators may soon feel pressure to tighten disclosures. Whether companies will actually move sites because of water concerns remains unclear.
We’ll need better data before any massive roll-outs get the green light. The debate is far from settled.
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Common Questions Answered
Why are experts warning that new U.S. data centers could face a resource bottleneck if built in water‑stressed California?
California’s chronic water scarcity makes it a liability for power‑hungry data centers that rely on cooling towers and humidifiers, which consume large volumes of water. Continued expansion in the state could strain already limited water supplies, hindering reliable operation and growth.
What specific action did Governor Gavin Newsom take regarding data‑center water‑use disclosure, and what reason did he give?
In October, Governor Gavin Newsom vetoed a bill that would have required data‑center operators to disclose their water consumption. He argued that California is "well positioned to support the development" of data centers, suggesting the disclosure requirement was unnecessary.
According to the research brief “If the US Has to Build Data Centers, Here’s Where They Should Go,” which regions are recommended as alternatives to California?
The brief advises scouting states with more abundant water supplies, highlighting locations such as Arizona and other western states that face fewer water‑stress challenges. These regions can provide the necessary resources for cooling without exacerbating scarcity.
How much are Meta and OpenAI planning to invest in domestic data‑center infrastructure, and why does this amplify concerns about California’s water issues?
Meta plans to invest $600 billion and OpenAI has earmarked $1.4 trillion for U.S. data‑center projects through 2028. Such massive expansion could intensify water demand in California, reinforcing experts’ call to locate new facilities outside the state’s water‑stressed areas.