But industry executives argue that the trade-off between water and energy is often misunderstood. Doug Adams of NTT Global Data Centers, the world’s third-largest data center operator, says closed-loop systems can reduce overall energy demand. “It’s more costly to build up front, but in the long run it’s more efficient to use [coolant] to evacuate heat,” he says.
OpenAI chief Sam Altman—whose start-up has committed to spend $600 billion on infrastructure by the end of 2030, according to people familiar with the matter—recently bristled at the suggestion that data centers consume huge amounts of water. Appearing at the India AI summit in February, he said that concerns about AI’s water consumption were “totally fake,” arguing that evaporative cooling was a problem of the past.
Yet the sheer scale of the projects planned for the next five years by hyperscalers and others means that water consumption is expected to surge.
Compounding fears is a suspicion that AI facilities are driving up energy prices. On average, American bill payers—including residential, commercial, and industrial customers—paid over 6 percent more for electricity year on year at the end of 2025. This increase was starkly higher in the mid-Atlantic states that house a large number of data centers, such as Pennsylvania and Virginia, where bills rose by 19 and 10 percent, respectively.
Of the roughly 100GW of additional electricity capacity that the US is projected to need at peak times by 2030, roughly half will be used by data centers, according to the Department of Energy.
In Illinois, Deppert says rising energy demand is feeding into already tight margins for farmers. “Everything we do is energy intensive,” he says. “If those costs keep going up, that comes straight off the bottom line.”
Tech executives have sought to allay such fears, committing last month to “build, bring, or buy new-generation capacity for data centers and pay the full cost of infrastructure upgrades required to support their operations.”
Increasingly, however, popular resistance is having an impact. Amazon was forced to abandon a proposed data center project in Tucson, Arizona, after residents raised concerns over water and energy use, while Microsoft faced opposition in Caledonia, Wisconsin, over similar issues.
Small towns across the US are also skeptical of the industry’s promised economic benefits. “Technology companies talk about a sense of urgency. This is only the case because they’re in an arms race,” says Jonathan Koomey, a former project scientist at Berkeley Lab. “Is there a social urgency? I’m not sure there is one.”
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