More than two dozen North Carolina communities have adopted moratoriums or zoning restrictions on data centers as concerns grow over noise, electricity demand and water use.
The pushback comes as tech companies plan billions of dollars in new investment across the state and lawmakers debate how tightly the industry should be regulated.
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Antone Jain, a water engineer who works with data centers across the country, says utilities are already grappling with population growth, aging infrastructure and drought. Now, the rapid expansion of artificial intelligence is adding another source of strain for water supplies.
"It's job security for water engineers," Jain said. "No one knows how bad it's going to be, but it's going to be bad for sure."
The concerns are playing out nationwide.
In Utah, public opposition helped force developers of a massive AI-focused data center project backed by investor Kevin O'Leary to significantly scale back plans amid concerns about water use near the drought-stricken Great Salt Lake. In Georgia, residents started complaining about low water pressure before officials discovered a large data center campus had consumed nearly 30 million gallons of water that wasn't initially being tracked by the local utility.
A recent analysis by The Guardian found roughly two-thirds of planned U.S. data centers are slated for areas that experienced drought conditions during the past year.
North Carolina isn't facing those problems today. But the examples illustrate why communities are asking questions before projects are built instead of after.
Those questions have become more urgent as artificial intelligence changes the scale of the industry.
Traditional data centers have existed for decades. Many of the newest facilities are hyperscale campuses designed to support AI computing, packed with graphics processing units, or GPUs, that generate significantly more heat than traditional computing equipment.
Some facilities cool servers using outside air. Others rely on refrigeration systems similar to oversized air conditioners. Some use evaporative cooling, which removes heat by evaporating water. Others use closed-loop systems that continuously recirculate water rather than drawing new supplies.
Which system a company chooses can have major implications for both water use and energy demand.
"There are tradeoffs, and it's not one-size-fits-all," Jain said.
"Evaporative uses a lot more water, but it uses much less energy," he said. "Closed loop can use more energy, but less water."
Those engineering decisions are increasingly becoming policy decisions.
The North Carolina House recently passed Senate Bill 730, legislation that would place new restrictions on hyperscale data centers if it ultimately becomes law. Among other provisions, the bill would largely prohibit evaporative cooling systems and require large data centers to cover the infrastructure costs associated with serving them.
Rep. Matthew Winslow, a Franklin County Republican and one of the bill's leading supporters, said the proposal is designed to protect drinking water supplies while ensuring costs aren't shifted to residents.
"It bans wasteful evaporative cooling," Winslow said. "Data centers must also contractually cover all the new infrastructure and energy costs, so they don't shift to ratepayers."
The legislation emerged amid growing public skepticism toward large data center projects.
An Elon University poll released this spring found just 24% of North Carolinians support a data center being built in their community. Residents have packed public meetings from Apex to Edgecombe County, raising concerns about water use, noise, electricity demand and transparency.
Industry groups argue that those concerns often overlook the economic benefits data centers can bring.
Khara Boender, state policy director for the Data Center Coalition, which represents companies including Amazon, Google, Microsoft and Meta, told lawmakers the industry contributed $18.5 billion to North Carolina's economy in 2024, supported more than 117,000 jobs and generated approximately $1.4 billion in state and local tax revenue.
"These investments often occur in rural communities seeking jobs, tax base growth and infrastructure investment," Boender said.
North Carolina's combination of available land, energy infrastructure and economic incentives has made it increasingly attractive to developers.
"North Carolina has talent. North Carolina has land. North Carolina has energy," said Shannon Kellogg, Amazon Web Services' vice president of public policy for the Americas.
The projects planned here also highlight how differently companies are approaching water use.
Microsoft says its proposed Person County campus will use air-cooled chillers and a closed recirculating water loop rather than traditional water-intensive cooling methods. The company has also pledged to "minimize our water use and replenish more of your water than we use" as part of its North Carolina Community Pledge.
Amazon says its Richmond County campus will rely on outside air cooling roughly 93% of the year. Water-based cooling would be used only during the hottest periods, accounting for less than 7% of annual operations, according to the company.
Amazon says that approach reduces electricity demand by 25% to 35% during peak summer periods when demand on the electric grid is highest.
"Most of our data centers don't use water for cooling on a daily basis,"an Amazon spokesperson said in an email to WRAL. "Most of the year it's cool enough that we can use outside air for cooling."
The company also says the Richmond County project will draw from existing surplus capacity in the county's water system and will not require additional investment from local ratepayers.
"As people understand what the facts are on water use and how companies like ours use a very limited amount of water, then we end up having a good dialogue and people are less concerned," Kellogg said.
For utilities, however, one challenge is that many of the answers communities want don't exist yet.
Data centers have operated in North Carolina for years, but the scale of growth driven by artificial intelligence is largely unprecedented.
"There just isn't the history there to know," said Heather Summers, executive director of the North Carolina Rural Water Association.
Water systems are already planning for growth, aging infrastructure and increasingly extreme weather. Forecasting the long-term demands of AI infrastructure adds another layer of uncertainty, particularly for smaller utilities.
"It's a hard balance," Summers said. "They want the industrial users to come in and create jobs and support that community financially, economically, all those good things. But they don't know the impact on the water system yet, or the environment."
Part of that uncertainty centers on a growing industry commitment known as "water positive."
Amazon says it plans to become water positive by 2030, meaning it aims to return more water to communities than it uses in its direct operations. The company says it is already about 75% of the way toward that goal.
In North Carolina, Amazon points to a project with the National Fish and Wildlife Foundation to restore and protect 20,000 acres of longleaf pine forest in the Pee Dee River basin. The company says the project is expected to replenish roughly 1.6 billion liters of water annually through improved watershed health.
Microsoft has also committed to becoming water positive by 2030. As part of a new initiative announced this year, the company says it will reduce water use at its data centers, replenish more water than it withdraws and publicly report water-use data for each data center region in the country
Jain said those pledges can be meaningful, but communities should understand how they are measured.
"You really need to read the fine print," he said.
Some companies measure water withdrawals. Others focus on water consumption. Replenishment projects can occur in different locations and use different accounting methods.
"It has to be local to that watershed," Jain said. "You can't do it on a global basis."
For communities weighing whether to welcome data centers, that distinction matters.
Local officials are being asked to make decisions about projects expected to operate for decades while many of the industry's long-term water demands remain uncertain.
For now, companies have projections, engineers have models and communities have questions — many of which may not be fully answered until the facilities are built and operating.