Artificial intelligence has seemingly, overnight, integrated into our daily lives. From requesting a recipe to a Fortune 500 company automating tasks, we have come to rely on AI for its efficiency, convenience and productivity.
With growing demand for AI technologies comes a stark question – where will the data centers that fuel AI be built, what are their potential impacts and how can those impacts be mitigated?
Digital backbone
Data centers power AI systems by providing the computing, storage and networking necessary to process vast amounts of data. These facilities accommodate thousands of servers that train AI models and generate responses.
AI tools like ChatGPT rely on data centers to perform the calculations required to understand prompts, retrieve information and produce responses in real time. Demand has grown rapidly as businesses, governments and consumers increasingly adopt AI-powered tools.
Community impacts
As demand for data centers grows, so do public concerns about their potential impacts. Among the most commonly cited concerns:
Electricity demand: Data centers require substantial electricity. A single ChatGPT response uses 10 times more electricity than a Google search; using generative AI in each Google search would consume the annual output of four to five nuclear reactors.
Water usage: Data centers use significant quantities of water to cool their machines. A medium-sized data center can consume approximately 110 million gallons annually, while larger facilities can use up to 5 million gallons per day.
Noise: Data centers produce persistent noise from cooling equipment and backup generator testing. Without adequate mitigation, data centers can disturb nearby residents who face elevated risks of annoyance and sleep disturbance.
Pollution: Data centers connected to an electric grid increase emissions from fossil-fuel power plants, including fine particulate matter, nitric oxide and sulfur dioxide. Emissions from diesel backup generators include nitrogen oxide and particulate matter.
Zoning controls
Municipalities administer zoning laws that control where and how data centers can be built and operated, placing them at the forefront of weighing data center benefits against their potential impacts.
The benefits of data centers should not be ignored — they generate substantial property tax revenue, garner private investment and create construction and permanent technical jobs. On a national scale, AI can bolster American business competitiveness and enhance U.S. military capabilities.
Developers, municipalities and interested parties alike should be attuned to how data centers can and have been regulated. Municipalities that do not enact data center-specific regulatory standards risk forfeiting control over their development.
For example, Stratos, a 40,000-acre data center project in Box Elder County, Utah — covering an area roughly the size of Manhattan — is moving forward with minimal local government oversight because the county had not established zoning regulations before the project was proposed.
To plan for data centers, municipalities have certain land use controls at their disposal.
One tool is a zoning moratorium, which temporarily suspends a particular type of development while local officials establish regulations governing that use. In May, for example, the town of Morris, Connecticut, enacted a one-year moratorium prohibiting data center development. Moratoria, however, must be limited in duration and scope, making them a short-term solution to a long-term planning need.
Another tool is zoning regulations. The town of Groton has developed regulations that limit data center size and proximity to other data centers, restrict cooling infrastructure and fuel sources, and establish noise mitigation, fire suppression, utility agreement and buffer requirements to protect nearby residential districts.
Other municipalities have imposed outright bans or restrictions. Mansfield, Massachusetts, for example, recently banned data centers requiring more than 10 megawatts of electricity.
While data centers may be an emerging land use, developers should anticipate a regulatory process akin to other complex proposals, which can include layers of oversight from municipal, state and federal government agencies.
Andrew R. Morin is an associate in the Real Estate group at law firm Hinckley Allen.
