California bill requires data centers to report water usage, awaits Newsom signature

California lawmakers have passed Assembly Bill 93, which would require data centers to report their water consumption both before operating and annually thereafter. The legislation, now awaiting Governor Gavin Newsom’s signature, comes as the AI-driven data center boom puts growing pressure on water resources in California and the drought-stricken Southwest.

Why this matters: Data centers can consume massive amounts of water for cooling—up to 500,000 gallons per day for a 100-megawatt facility—yet many companies don’t currently disclose their usage, making it difficult for communities to plan for water allocation amid ongoing shortages.

Key details: The bill requires both new and existing data centers to submit water usage projections and annual consumption reports to help local authorities better manage resources.

• “Data centers are popping up all over the place, and they demand so much water,” said Assemblymember Diane Papan (D-San Mateo), the bill’s author and chair of the Assembly Water, Parks and Wildlife Committee.
• The legislation aims to prevent scenarios where “we don’t end up with a data center without sufficient water, and we don’t end up with a community that has a data center that takes too much water away from the community.”
• Business groups including the Data Center Coalition have opposed the measure, and Newsom has until October 12 to sign or veto it.

The big picture: California has more than 300 data centers with many more planned, while the ongoing Colorado River water shortage is expected to force additional water use reductions across the Southwest in coming years.

• A recent Ceres report found that cooling water alone in the Phoenix area could increase to more than 3.7 billion gallons per year—enough to supply a city of about 80,000 people for nearly two years.
• Much of the nation’s data center construction boom is occurring in arid states including California, Arizona, and Texas, where water strains are mounting amid dry conditions and rising temperatures.

How water usage varies: Different cooling systems dramatically affect water consumption, with some facilities using virtually no water while others require millions of gallons daily.

• Facilities with closed-loop dry coolers may use virtually no water on-site, while those relying on evaporative cooling are more water-intensive, though the water-saving systems are generally more energy-intensive and costly.
• Google’s environmental report shows its data centers range from nearly zero water use to more than 3 million gallons per day, with some water-intensive centers requiring five to six times as much water as an average golf course.

What they’re saying: Experts argue that transparency around water usage is essential for responsible resource management as the industry expands.

• “We ask California residents to switch to artificial turf and display ‘water conservation’ stickers in public places, yet data center water use remains hidden,” said Shaolei Ren, UC Riverside associate professor who studies data center resource use.
• “Disclosure doesn’t hurt the industry or add costs; it simply helps us track and manage a vital resource more responsibly as we build the next generation of data centers.”
• Google said 72% of its water “came from sources at low risk of water depletion or scarcity” and emphasized its focus on “advancing responsible water use.”

Bottom line: The rise of artificial intelligence and growing cloud computing investments are driving the data center construction boom, with researchers warning that companies and shareholders need to address sustainability risks proactively to avoid potential financial losses.