San Jose data centre boom faces pushback from residents, green groups
Residents and environmental groups in San Jose are organising against a wave of proposed AI data centre projects, citing concerns over energy, water and pollution. City officials have courted the developments for tax revenue, while state lawmakers weigh new transparency and cost measures.
Residents and environmental groups in San Jose, California's third-largest city, are mobilising against a wave of proposed data centre projects that officials have courted to position the city as an AI infrastructure hub. The clash highlights a challenge facing policymakers across the United States: how to support an industry seen as critical to economic competitiveness while addressing public concerns about the electricity, water and pollution impacts of the facilities required to power it.
San Jose, home to nearly 1 million people, has embraced the industry's growth. Last year, city leaders announced an agreement with utility PG&E to speed up power delivery to large energy users such as data centres. The city estimates each new facility could generate between US$3 million and US$6 million in annual tax income for services including police, fire protection, libraries, roads and parks.
Despite Silicon Valley's wealth, many residents remain unconvinced the benefits will be broadly shared. "The companies have to prove to us why they deserve our resources and how they're going to give back to the community," said Ellina Yin, a leader of the grassroots I Love San Jose coalition. Yin and others are pushing for stricter public review, more transparency around energy and water use, and studies of health and environmental impacts before more projects are approved.
Mayor Matt Mahan said the answer is not to halt data centre development but to ensure it is done responsibly. "People are right to question, 'Is this pushing up my energy costs? Is it using our clean water supplies? Will it degrade quality of life in my city?'" Mahan told Reuters. "These are very fair questions."
Air quality is a particular concern. In April, a coalition led by the Center for Biological Diversity petitioned the Bay Area Air Quality Management District to strengthen oversight of diesel backup generators used at data centres, arguing that existing regulations predate the recent expansion of AI-related facilities. The district said it is exploring whether stronger protections are warranted.
The concerns have reached Sacramento, where lawmakers have given final approval to several bills addressing data centres, including measures to ensure large electricity users pay their share of grid costs and to increase transparency around energy and water consumption. State Senator Steve Padilla, who authored several measures, said California has an obligation to lead because it is home to many of the world's largest technology companies.
The Data Center Coalition, an industry trade group whose members include Google, Meta, OpenAI and Anthropic, said it supports responsible growth but argued the bills unfairly single out data centres. The group warned the measures could discourage investment and push jobs, tax revenue and projects to other states. Governor Gavin Newsom has until the end of the month to sign or veto the legislation; his office declined to comment because the bills are pending.
