According to DCD, global data center capex will total $3 trillion between 2025 and 2029, thrusting these once-invisible facilities into geopolitical significance as the US, China, and Europe compete in the AI race. The Trump administration designated data centers as critical national infrastructure in 2025, while the UK places them on par with energy and emergency services. One large data center now consumes as much power as 100,000 households, representing 30% of all power demand in Virginia and over 20% in Ireland. Meanwhile, water consumption is emerging as equally critical, with a 1MW facility using up to 25.5 million liters annually—equivalent to ten Olympic swimming pools—while opposition from local communities is rising globally.
The energy reality check
Here’s the thing about data center power demands: we’re talking about facilities that basically need small-city levels of electricity. And when you combine that with stretched power grids that need urgent upgrades, what happens? Natural gas becomes the default solution. We’re already seeing data centers opt for ‘island power’ using combined cycle gas turbines fed by pipelines. Sure, everyone talks about renewables and nuclear—the UK just announced a 300MW small modular reactor for data centers—but renewables are intermittent and SMRs won’t be standardized until the early 2030s. So we’re stuck with gas for the foreseeable future, which directly challenges the tech sector’s net zero ambitions. Not exactly the green future we imagined, is it?
The water and carbon elephants
While energy gets all the headlines, water consumption is becoming the real nightmare. Think about this: data centers are increasingly being built in water-stressed regions from the US West Coast to the Middle East, and they’re mostly using drinkable water. That’s putting enormous pressure on local communities. The good news is that new AI data centers using liquid cooling can cut water use by about 50%, and companies are exploring co-location with water treatment facilities. But the scale is staggering—some facilities now exceed 1GW, making water management absolutely critical. Meanwhile, lifecycle carbon is becoming the next frontier as grids decarbonize. Just like with electric vehicles where battery supply chain issues became a major concern, data centers need to address everything from sustainable materials to reusing existing buildings.
Community resistance grows
Local opposition is becoming a real problem for data center developers. Remember that xAI facility in Memphis where portable methane turbines were used without air permits? That’s exactly the kind of thing that turns communities against these projects. Residents worry about electricity bills rising, water shortages in stressed areas, and now—with SMRs on the horizon—nuclear reactors in their backyards. Google actually halted a $200 million project in Chile over environmental concerns. The economic benefits like jobs and district heating—which London is actively exploring through data center waste heat recycling—are increasingly outweighed by community worries. Basically, if you’re building industrial computing infrastructure, you need industrial-grade community engagement strategies.
The sustainability jigsaw
Looking at the big picture, data center operators face a complex puzzle where all the pieces connect. You can’t just solve the energy problem and ignore water, or address carbon while alienating local communities. Optimal sites are dwindling fast, and companies need to think creatively about locations near existing infrastructure like decommissioned power stations. Water strategy in particular needs to move front and center, with approaches like those highlighted by AECOM’s water-focused data center planning. The companies that will succeed are those treating sustainability as an integrated challenge rather than a checklist. They’re the ones who understand that in industrial technology infrastructure, every component matters—from the panel PCs managing operations to the community relationships that determine whether projects get built at all.
