The United States is experiencing a record-shattering drought, yet AI data center builders continue to push forward with new projects in affected regions, according to TechRadar Pro. Out of 809 planned data centers, 517 are located in areas under drought influence for the past year, creating tensions over water and power resources. A poll cited in the article found that 70% of Americans do not want to live next to a data center, and the issue is becoming increasingly political.
Water and Power Consumption Beyond the Data Center
The AI industry maintains that closed-loop cooling systems are highly efficient, and operators like AWS are implementing custom loops to address water use. However, according to a report by Xylem, only 4% of the increase in AI-centric water demand is directly attributed to data center cooling. The remaining 96% is indirect: 54% from power generation and 42% from semiconductor fabrication. This means that while regulators focus on data center cooling, the larger water footprint from energy and chip production may be overlooked.
Power is another critical challenge. The US grid is already expected to be strained, with increasing costs passed on to consumers. All current data center buildouts will require reliable power to support the compute they are expected to house, even as insurers raise concerns about construction risks.
Local Backlash and Political Implications
The impact is being felt most acutely in rural, conservative populations—a key voter demographic for the current US administration. Seattle has effectively banned new data center projects for an entire year as the city grapples with higher electricity costs and a lack of tangible benefits for residents. Andrew Coppin, CEO of Ranchbot (a tool for ranchers to monitor water use), told The Guardian:
“The concerns from farmers are real and justified. Datacenters are flavor of the month now, but we wouldn’t make the choice to only be able to have a shower on Mondays, Wednesdays, and Saturdays. I mean, ChatGPT is a pretty nice tool, but most people would prefer to have a beef steak if they had to choose.”
Industry Outlook and Implications for Enterprise Technology Leaders
Water and power are shaping up to be AI's biggest challenges over the next decade, even as companies continue to demand more compute. For enterprise technology decision-makers, these trends carry direct implications: rising operational costs for cloud and AI services, potential delays in data center availability, and increasing regulatory scrutiny. The indirect water and power demands of AI—embedded in semiconductor supply chains and grid infrastructure—mean that sustainability and resilience must be factored into long-term technology procurement and investment strategies. The drought and local opposition are unlikely to halt the AI buildout, but they will reshape where and how data centers are built, and at what cost to communities and businesses alike.
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