U.S. cities are putting new limits on AI data center development as local communities raise concerns about water supplies, electricity costs, and land use.
Austin, Texas, became the latest city to act on Thursday. Its City Council voted unanimously to begin drafting rules that could restrict new data centers or keep them out of certain areas.
The vote came after a Ceres study examined water withdrawn by power plants that serve data centers in Virginia, Texas, California, Illinois, Georgia, Ohio, and Arizona. Those seven states are home to about half of the nation’s data centers.
According to the study, the plants withdraw about 3.4 trillion gallons of freshwater a year, equal to 10.4 million acre-feet. That is more than California’s average annual urban water demand of 8 million acre-feet. The study also said the figure is about 12 times the combined annual water use of Los Angeles, Phoenix, and Washington, D.C.
Kristen James, senior program director for water at Ceres, said in a statement: "Overall, we saw that 66% of the power plants that use water in those states were exposed to medium to high water stress."
The study measures water drawn by power plants from rivers, reservoirs, and other sources to generate electricity for data centers. Some of that water is returned, but water consumed through evaporation or other processes is not immediately available for reuse.
Austin officials will now draft changes to the Land Development Code to define data centers and put safeguards in place. Council members are expected to review the first phase of the ordinance in December.
Public Citizen, a nonprofit consumer advocacy group, said the vote stood in contrast to what it called inadequate action from Texas state leaders.
Kaiba White, an Austin-based climate policy specialist for Public Citizen, said in a statement: "While Gov. Greg Abbott can only offer performative and mostly voluntary measures, local leaders are acting to protect the community from large-scale data centers."
Austin is one of several U.S. cities that have taken action to stop data centers used for AI computing and other technologies from being built within city limits.
In June, San Marcos, Texas, barred data centers under its zoning laws. Durham, North Carolina, and Cave City, Kentucky, imposed moratoriums. Earlier this month, Jersey City, New Jersey, banned data centers as the primary use of industrial property.
The backlash has also led to arrests. The report said at least 37 Americans have been detained during AI data center protests so far in 2026.
The push to limit data centers has also moved beyond local ordinances and into state legislatures.
In April, Maine lawmakers approved what would have been the country’s first statewide moratorium on large data centers. Gov. Janet Mills later vetoed the bill because it did not exempt a proposed project in Jay. She later created an advisory council to study data center policy.
Earlier this month, Pennsylvania imposed new requirements on large data centers, including annual reporting on water and energy use.
Opposition to AI data centers has also reached the streets. In March, roughly 200 protesters marched outside the San Francisco offices of OpenAI, Anthropic, and xAI, calling for a pause in the development of more powerful AI systems.
