As AI expands, California communities debate new data center projects
As California races to build the infrastructure needed to power artificial intelligence, communities across the state are increasingly weighing whether they want data centers in their own backyards.
The rapid expansion of AI has fueled demand for new data centers, prompting local governments to consider proposals from developers while lawmakers debate how the facilities should be regulated.
Some cities are embracing the projects. Others are putting the decision directly in the hands of voters.
Last month, voters in Monterey Park overwhelmingly approved a ballot measure prohibiting the development of new data centers within city limits. More than 86% voted in favor of the ban.
In Calistoga, residents recently voiced concerns during public meetings over the possibility of data centers being built on the Napa County Fairgrounds.
Gov. Gavin Newsom said he believes those decisions should remain with local governments.
"I believe localism is determinative," Newsom said. "It's a local planning decision, and I think that's appropriate."
At the same time, Newsom said major technology companies should help pay for the infrastructure needed to support their operations.
"You're Microsoft. You can afford to make those contributions. You're Google. You can afford to make those contributions," he said.
Data centers, which store and process the massive amounts of information used by AI systems, have drawn criticism for their high electricity and water demands, as well as concerns over noise and environmental impacts.
While data centers have operated in California for decades, the AI boom has accelerated interest in building new facilities across the state.
CBS News Sacramento reached out to several data center operators about their water and energy use. Most declined to comment.
Paul Royere, senior vice president of finance and administration for Stockton-based Nautilus Data Technologies, said modern data centers can provide economic benefits while minimizing environmental impacts when they are built in appropriate locations.
"Built in the right areas under the existing environmental and permitting requirements, data centers are a net add to communities," Royere said.
He said facilities should be located in industrial areas with existing infrastructure rather than in residential neighborhoods or rural communities.
As development proposals continue to surface, Newsom said the California Public Utilities Commission has been tasked with developing recommendations on how the state should regulate data centers while protecting Californians from higher electricity costs.
Several bills are also moving through the California Legislature that would establish new oversight of data centers. Among the proposals are requirements for operators to publicly report monthly water and energy usage and to incorporate data centers into California's statewide water shortage planning.
