AI Data Centers: Power, Water and Nuclear Restarts

U.S. data centers could consume up to 110 billion gallons of water a year by 2030, according to a March analysis by scientists from the University of California, Riverside and other institutions. That equals 7% of total annual consumptive use in U.S. public water systems. The demand is real. It's arriving fast.

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. That's roughly 12 times the combined annual water use of Los Angeles, Phoenix and Washington, D.C. Public anxiety is close behind. 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.

The Energy Math

A facility's environmental effects depend heavily on where it sits, what generates its power and which technology it runs. Limited transparency from AI providers makes precise estimates difficult. Some numbers are sobering, while others point the other way. An International Energy Agency analysis found that simple text queries typically use less electricity than a television over the same period. Video generation, by contrast, can sometimes require thousands of times more energy. The IEA also found AI data-center electricity consumption surged 50% last year.

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 estimates data centers could account for up to 12% of U.S. electricity consumption by 2028 as AI expands. That's a large share for one category of user to claim in just a few years.

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

Water, Heat and Noise

Water use varies with cooling technology, power source and local conditions. One oft-cited estimate says generating a 100-word email with an AI chatbot requires about one bottle of water, just over two cups. OpenAI CEO Sam Altman has said an average ChatGPT query uses about one fifteenth of a teaspoon. The gap between those figures is wide. It's a reason to be skeptical of any single number. A 2025 Bloomberg analysis found around two-thirds of U.S. data centers built or under construction since 2022 are in water-stressed areas, a finding that deserves real scrutiny. Technology companies say they're developing cooling systems to reduce water use. Some analysts argue the water concerns have been overestimated, comparing data-center demand with the water used to produce a burger or a cotton shirt.

Noise is a more local grievance. Cooling systems, gas turbines, diesel generators and other equipment make sound at data centers. Residents near a large facility in Vineland, New Jersey, have filed noise-pollution lawsuits. Soundproofing can reduce the problem, and some experts have urged state and local governments to strengthen noise regulations.

Heat is another issue. An Arizona State University study found data-center heat pollution warmed downwind Phoenix neighborhoods by as much as 4 degrees Fahrenheit. Lead author David Sailor, director of ASU's School of Geographical Sciences and Urban Planning, said, "Even if these data centers only contribute to an additional heat island magnitude of 1 degree or 2 degrees, that can still have a very significant impact on our lives." More research is needed, and some experts say data centers aren't substantially different from other industrial facilities in their heat effects.

The Mineral Supply Chain

AI hardware also depends on minerals and metals for semiconductors and data-storage components. Mining those materials, often in the Global South, has been linked to air and water pollution, deforestation, health risks and climate pollution. Electronic waste will grow alongside the hardware, and only about a fifth of it is currently recycled. Mineral demand could also compete with the wind and solar industries, central to reducing planet-heating pollution.

Kaveh Madani, director of the United Nations University Institute for Water, Environment and Health, said communities should ask "who benefits from it" before a new data center is built. He pointed to whether a facility creates jobs or improves the local economy, and whether it takes water from users who need it more, such as farmers. "There are trade-offs like any other technology," Madani said. "It has has downsides that need to be regulated, monitored, and mitigated."

Nuclear Restarts Enter the Picture

Washington is turning to shuttered nuclear plants to meet rising demand. The Department of Energy is lending as much as $4.4 billion to restart 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 three plants would restore 2.25 gigawatts of electricity, enough to power roughly 2 million homes and businesses. All three closed before their licenses expired, largely because their electricity was considered too expensive to keep running. No commercial nuclear reactor is known to have resumed generation after beginning decommissioning, although some reactors have restarted after long outages.

Two of the plants have contracts with technology companies willing to pay a premium for large amounts of carbon-free electricity. The Trump administration is promoting nuclear power for AI and manufacturing and lending billions for upgrades at operating plants. Todd Allen, associate dean for research at the University of Michigan's College of Engineering, said restarting a reactor is a relatively quick route to substantial electricity and costs less than building a new large reactor. "There's a demand in the country for more power," he said. "You have these assets that were previously hooked up. They were previously operable, and you can relatively quickly get them generating electricity again." Allen compared the job to restoring a car that's sat idle, though he noted it's a much larger and more complicated system. Owners must bring workers back, keep training current, check equipment, secure fuel and ask regulators to restore operating licenses.

Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, argued that taxpayer money should address safety risks. Most U.S. plants were built between 1970 and 1990 and designed for the natural disasters of that era, he said, while climate change is making extreme weather more frequent and severe. "It's possible, if they set the right level of safety and spend the necessary funds to meet that, they could restore these plants to operable condition," Lyman said. "That's not happening at this point."

Three Plants, Three Stories

Iowa's Duane Arnold began operating in 1975 and was scheduled to close permanently in October 2020. Replacing it with cheaper sources, including wind, was projected to save Iowa customers $300 million in energy costs. A powerful storm known as a derecho damaged the plant, which shut down early, in August 2020. NextEra Energy owns the plant, and CEO John Ketchum said company officials "felt really good about the ability to bring it back." NextEra and Google are collaborating to restart it by early 2029. Ketchum called it "a perfect example of data centers paying their own way," adding that a long-term contract with a hyperscaler means none of the project's costs fall on residential customers in Iowa.

Palisades operated from 1971 until 2022, when owner Entergy left the nuclear power business. Its operating license runs until 2031. Holtec International bought the plant and began dismantling it, though none of those steps was irreversible. Michigan officials encouraged Holtec to pursue reopening and provided state funding. The Biden administration approved a $1.5 billion loan in 2024, and the Trump administration continued payments. Holtec began loading nuclear fuel in August, one of the final major steps before restart, but paused after a fuel assembly tilted from its upright position. The company is working to determine why. Power purchase agreements require Palisades to be operating by March 2027.

Microsoft has a contract with the Crane Clean Energy Center outside Harrisburg. Three Mile Island was the site of the nation's worst commercial nuclear power accident, in 1979. That accident destroyed one reactor and left the other functioning until Exelon shut it down in 2019, saying it was losing money and Pennsylvania lawmakers had declined to subsidize it. Constellation announced in 2024 that 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, and Deputy Energy Secretary James Danly toured the site last week.

Debate Over the Price Tag

Jack Spencer, director of the Heritage Foundation's Center for Energy, Climate and Environment, said he couldn't think of a worse use of taxpayer money than restarting reactors. He argued the projects are low-risk and energy demand is high. Jennifer Gordon, director of the Atlantic Council's Nuclear Energy Policy Initiative, called federal financing a "terrific way" to provide needed electricity. The World Nuclear Association said restarts should be celebrated, but preventing premature closures would be better. It noted Palisades is expected to be the first nuclear plant in the world to resume power generation after beginning decommissioning. Canada, Armenia, Belgium, Japan, India and South Korea have restarted or refurbished reactors after long shutdowns.

Why This Matters: The country is betting that aging, already-built reactors can carry a share of the load AI companies are creating, and that this bet can cost less than starting from scratch. Together, the three plants would supply roughly 2 million homes and businesses, a meaningful addition to the grid. Yet the sums involved are large, with up to $4.4 billion in federal lending on the table, and the projects depend on private operators and long-term contracts with technology firms willing to pay a premium. Iowa's arrangement, which Ketchum described as keeping residential customers out of the cost, shows how market terms can shift risk away from ratepayers when they're written carefully. Harder questions involve water in drought-prone areas, the health costs of gas turbines and whether the next wave of data centers will be built where communities actually want them. Bloomberg NEF expects record U.S. clean-energy construction in 2026 and 2027, even as the same demand drives a major expansion of natural gas. Those forces pull in different directions, and how they resolve will shape household power bills and the national energy mix for years to come.