California data centers face water use disclosure rules as AI demand grows

California lawmakers have passed two bills, authored by Assemblymember Diane Papan, that would require data centers to disclose their water usage and plans. The bills, now awaiting Governor Gavin Newsom's signature, aim to increase transparency regarding the industry's water consumption, a concern amplified by the rising demand for AI. Last year, Governor Newsom vetoed a similar bill, citing reluctance to impose rigid reporting requirements without fully understanding the impact on businesses and consumers.

OpenAI CEO Sam Altman has downplayed concerns about AI's water use, asserting that 38,000 ChatGPT queries use as much water as producing a single almond in California. However, experts like Shaolei Ren, a professor at UC Riverside, argue that it's nearly impossible to verify such claims due to the industry's lack of public data. Ren highlighted that factors such as data center location, external temperature, cooling systems, and query complexity significantly affect water usage, making a single statistic insufficient.

The proposed legislation includes provisions that would require operators to report water sources and usage for business permits and would prevent local governments from approving new data centers without developers disclosing their water plans and paying for necessary infrastructure upgrades. These efforts come as data center development faces increasing opposition and local bans across the state. Research from the Congressional Research Service indicates a substantial increase in data center water consumption, with one study projecting hyperscale data centers could use 150 billion gallons of water from 2025 to 2030, equivalent to the annual use of 4.6 million U.S. households.

Ren further cautioned that peak water demand, especially on the hottest days, is a critical factor for community water systems, which are often aging and financially constrained. His research suggests data center cooling could require 697 to 1.45 billion more gallons of peak water capacity per day, comparable to New York City’s average daily supply. Unlike agricultural water, data centers often use treated, potable water from public systems, adding strain to existing infrastructure. Ren noted that less water-intensive cooling systems, while reducing water use by up to 50%, often lead to increased energy consumption.