AI Data Centers Shift Water, Power and Safety Costs

U.S. data centers could consume up to 110 billion gallons of water a year by 2030, equal to 7% of annual consumptive use in public water systems, as federal loans help restart shuttered nuclear plants to meet rising electricity demand. People and communities bearing the consequences don’t control the decisions driving that expansion. Kaveh Madani, director of the United Nations University Institute for Water, Environment and Health, says decision-makers should make clear “who benefits” before building a new data center, including whether it takes water from people who need it more, such as farmers.

Who Gets the Water and Power

A separate report from nonprofit advocacy organization Ceres found that data centers across seven states used around 3.4 trillion gallons of freshwater a year for electricity generation—roughly 12 times the combined annual water use of Los Angeles, Phoenix and Washington, D.C. Around two-thirds of U.S. data centers built or under construction since 2022 sit in water-stressed areas, according to a 2025 Bloomberg analysis.

The appetite for electricity is growing, too. AI data centers used around 0.5% of global electricity in 2025, according to Our World in Data, which projected that share could reach 1.5% by 2030. Nearly half of global data-center electricity consumption takes place in the United States. Lawrence Berkeley National Laboratory says data centers could account for up to 12% of U.S. electricity consumption by 2028.

A CNN poll conducted by SSRS in September found nearly 90% of Americans were more concerned than excited about the rise of AI data centers. Precise estimates remain difficult because AI providers share limited information, while environmental effects depend on location, electricity sources and technology. According to an International Energy Agency analysis, a simple text query typically uses less electricity than a television over the same period. Video generation can sometimes require thousands of times more energy. The IEA found AI data-center electricity consumption surged 50% last year.

Public Money, Private Demand

The Department of Energy is lending as much as $4.4 billion to restart three plants: the Palisades Power Plant in Michigan, the Crane Clean Energy Center at Pennsylvania's Three Mile Island and the Duane Arnold Energy Center in Iowa. Together, the plants would restore 2.25 gigawatts of electricity, enough to power roughly 2 million homes and businesses. Two plants have contracts with technology companies willing to pay a premium for large amounts of carbon-free electricity for data centers.

At Duane Arnold, NextEra and Google are working together on a restart targeted for early 2029. NextEra Energy CEO John Ketchum said a long-term contract with a hyperscaler means residential customers in Iowa aren’t paying any of the project’s costs. But replacing the plant earlier with cheaper sources, including wind, was projected to save Iowa customers $300 million in energy costs. A derecho damaged the plant, which shut down in August 2020.

Microsoft has a contract with the Crane Clean Energy Center outside Harrisburg. Constellation announced it would spend $1.6 billion to restart the reactor under a 20-year agreement with Microsoft and hopes to bring it online in 2027. The Energy Department provided a $1 billion loan. The Trump administration is promoting nuclear power for AI and manufacturing, and lending billions for upgrades at operating nuclear plants.

Costs That Don’t Stay on the Balance Sheet

Data centers are also building energy infrastructure, including gas turbines, to avoid straining local grids and raising bills. CNN said those turbines are less efficient than large power plants and can worsen climate and health effects through nitrogen oxides and fine particulate matter. One recent study estimated that the public-health burden of U.S. data centers could reach $20 billion by 2028. Globally, coal powers most data centers, at 30%, followed by renewables at 27% and natural gas at 26%. According to a January report from Global Energy Monitor, more than a third of natural-gas-fired power capacity in development in the United States is intended to power AI.

The costs extend beyond electricity and water. Residents near a large data center in Vineland, New Jersey, have filed noise-pollution lawsuits. Arizona State University scientists found in a study that data-center heat pollution warmed downwind Phoenix neighborhoods by as much as 4 degrees Fahrenheit. David Sailor, director of ASU's School of Geographical Sciences and Urban Planning, said even an additional heat island magnitude of 1 degree or 2 degrees “can still have a very significant impact on our lives.”

AI hardware requires minerals and metals. Mining, often in the Global South, is linked to pollution, deforestation, health risks and climate pollution. Only about a fifth of electronic waste is currently recycled, and AI’s mineral demand could compete with wind and solar industries. Madani said, “There are trade-offs like any other technology. It has has downsides that need to be regulated, monitored, and mitigated.” That’s the official language of managing the fallout. Who gets the benefits remains an open question.