San Jose data center push meets resident resistance as California weighs curbs
San Jose residents and green groups oppose AI data center expansion over power, water and pollution, as California bills await Governor Newsom's decision.
In San Jose, California's third-largest city, a wave of proposed data centers has run into organized opposition from residents and environmental groups, even as city officials court the projects to cement the area's status as a hub for artificial intelligence infrastructure.
The standoff reflects a broader dilemma for policymakers across the United States: how to nurture an industry seen as vital to economic competitiveness while addressing public anxiety over the electricity, water and pollution demands of the facilities that power it. The debate carries extra weight in California, home to many of the companies driving the AI boom, among them Google, Meta, OpenAI and Anthropic.
San Jose has leaned into the growth. Last year, city leaders announced an agreement with utility PG&E to accelerate power delivery to large energy users such as data centers. The city estimates each new facility could bring in $3 million to $6 million in annual tax revenue for services including police, fire protection, libraries, roads and parks.
Yet many residents remain unconvinced that the benefits will be widely shared. "The companies have to prove to us why they deserve our resources and how they're going to give back to the community," said Ellina Yin, a leader of the grassroots I Love San Jose coalition.
Yin and others are pressing for stricter public review, greater transparency around energy and water consumption, and studies of health and environmental effects before further projects win approval.
Mayor Matt Mahan said the answer is not to stop data center development but to ensure it is handled responsibly. "People are right to question, 'Is this pushing up my energy costs? Is it using our clean water supplies? Will it degrade quality of life in my city?'" he said. "These are very fair questions."
Air quality has emerged as a specific flashpoint. In April, a coalition led by the Center for Biological Diversity petitioned the Bay Area Air Quality Management District to tighten oversight of diesel backup generators at data centers, arguing that existing rules predate the recent AI-driven expansion. The district said it is examining whether stronger protections are needed.
PG&E said new large customers can help spread fixed grid costs across a wider customer base and contribute to lower bills.
The concerns have travelled to Sacramento, where lawmakers recently gave final approval in both the state Senate and Assembly to several bills addressing data centers. The measures are intended to ensure large electricity users pay their share of grid-related costs and to require more transparency around energy and water consumption.
State Senator Steve Padilla, who authored several of the proposals, said California has an obligation to lead given its concentration of major technology companies. The Data Center Coalition, an industry trade group whose members include Google, Meta, OpenAI and Anthropic, said it backs responsible growth but argued the bills unfairly single out data centers rather than other large industrial and commercial electricity users. The group warned the measures could deter investment and push jobs, tax revenue and projects to other states.
Governor Gavin Newsom, who is weighing the package, has until the end of the month to sign or veto the legislation. His office declined to comment because the bills are still pending before him.