Overview
- Several cities in Texas, North Carolina, Kentucky, and New Jersey are implementing bans or moratoriums on new data centers.
- Power plants that supply data centers across seven states consume approximately 3.4 trillion gallons of freshwater each year.
- In early 2026, local opposition emerged against at least 75 proposed projects, collectively valued at around $130 billion.
In response to rising concerns regarding water availability, electricity expenses, and land usage, cities throughout the U.S. are placing restrictions on the development of AI data centers.
On Thursday, Austin, Texas, became the most recent city to take action, with its City Council unanimously voting to initiate the creation of regulations that could limit or ban new data centers.
Myriad: How many days will Claude go down? Click to make your prediction.This decision followed a study by Ceres that analyzed water usage by power plants supplying data centers in Virginia, Texas, California, Illinois, Georgia, Ohio, and Arizona, states that together host nearly half of the nation’s data centers.
The study revealed that these power plants collectively extract around 3.4 trillion gallons of freshwater yearly, which equals 10.4 million acre-feet. This figure surpasses California’s average urban water demand of 8 million acre-feet and is nearly twelve times the total annual water consumption of Los Angeles, Phoenix, and Washington, D.C.
“Overall, we observed that 66% of the power plants utilizing water in these states faced medium to high levels of water stress,” stated Kristen James, senior program director for water at Ceres, in a statement.
The study accounts for the water drawn from rivers, reservoirs, and other sources by power plants to produce electricity for data centers. While some of this water is returned, the water lost through evaporation and other processes is not readily reusable.
Austin's officials are now tasked with revising the Land Development Code to define data centers and implement protective measures, with council members slated to review the initial phase of this ordinance in December.
The nonprofit organization Public Citizen remarked that the vote contrasted sharply with the inadequate responses from Texas state officials.
“While Governor Greg Abbott can only propose largely symbolic and voluntary measures, local leaders are taking meaningful steps to safeguard their communities from large-scale data centers,” said Kaiba White, a climate policy expert with Public Citizen based in Austin.
Following Austin's lead, other U.S. cities have also enacted restrictions on the establishment of data centers for AI computing and related technologies within their jurisdictions.
In June, San Marcos, Texas, prohibited data centers under its zoning regulations, while Durham, North Carolina, and Cave City, Kentucky, enacted moratoriums. Earlier this month, Jersey City, New Jersey, banned data centers as the main use of industrial land. This surge in opposition to AI data centers has led to arrests, with at least 37 individuals detained during protests related to AI data centers in 2026 alone.
Myriad: How high will Nvidia go? Click to make your prediction.The movement against AI data centers is not only limited to local regulations but is also influencing state legislation.
In April, Maine's lawmakers passed a bill proposing the nation’s first statewide moratorium on large data centers. However, Governor Janet Mills later vetoed this bill due to its failure to exempt a planned project in Jay, though she established an advisory council to examine data center policies. Recently, Pennsylvania introduced new stipulations for large data centers, including requirements for annual reporting on water and energy usage.
Protests against AI data centers have also taken to the streets. In March, approximately 200 demonstrators gathered outside the San Francisco offices of OpenAI, Anthropic, and xAI, calling for a halt to the development of more advanced AI systems.