Santa Clara County Data Centers Surge 23%, Now Second-Most in US
Santa Clara County has become the fastest-growing data center hub in the U.S., now ranking second overall, which is placing significant strain on the region's power and water infrastructure. The Santa Clara City Council approved a $350 million credit line for utility upgrades, and a pilot program with Emerald AI and Nvidia is testing energy management. Despite infrastructure challenges and growing environmental concerns, data centers are a vital revenue source for the city.
Santa Clara County has rapidly ascended to become the second-largest data center hub in the United States, now hosting 75 facilities and demonstrating a 23% growth rate between 2025 and 2026, the fastest among leading counties. This expansion, detailed in a National Association of Realtors survey reported by The Mercury News, correlates with higher home values and incomes in data center-dense areas, with new proposals consistently emerging around downtown San Jose.
However, this rapid growth is severely testing Santa Clara's local infrastructure. Data centers consume approximately 60% of the electricity supplied by Silicon Valley Power, the city's municipal utility. In response to this demand, the Santa Clara City Council approved a $350 million revolving credit line in July 2026 for substantial receiving-station upgrades. Concurrently, Silicon Valley Power, in collaboration with Emerald AI and Nvidia, has initiated a pilot program at a Santa Clara facility to explore dynamic GPU power management to reduce energy draw during peak times.
Water consumption has also become a critical point of concern. A May 2026 study by Next 10 and Santa Clara University researchers highlighted that the majority of California's operating and planned data centers lack publicly available documentation of their cooling water usage. This transparency deficit is fueling an intensifying environmental and regulatory debate throughout Silicon Valley regarding the industry's water footprint.
Despite the significant infrastructure challenges and environmental scrutiny, data centers are a crucial economic driver for Santa Clara, contributing approximately 13% to the city's general fund revenue. This financial benefit encourages local officials to continue attracting data center development, exemplified by proposals like Prologis's San Jose project, even as they grapple with the substantial demands placed on public utilities and natural resources.