In Nevada, the driest state, some hope to limit water-guzzling data centers

Reno, Nevada, is poised to become a new player in the nation’s data center construction boom, despite concerns about the state's water supply.

RENO, Nev. — On the western edge of Nevada, it’s hard not to think about water. The driest state in the country is often hit by droughts, but that hasn’t stopped developers from buying up ranches and farmland to build homes or businesses.

Today, Reno, “the Biggest Little City in the World,” is poised to become a new player in the nation’s data center construction boom. At least three data center projects have been approved since 2024, with more in a nearby industrial park.

The giant computing facilities are essential to the internet as we know it, providing the digital infrastructure for cloud storage and for emerging artificial intelligence systems. They also require massive amounts of energy to run and often need hundreds of thousands of gallons of water to stay cool.

Some community leaders, like Reno Vice Mayor Kathleen Taylor, have celebrated data centers, which can bring jobs and tax revenue. Earlier this year, officials projected a $25 million deficit in the upcoming budget year. But opponents argue that data centers can also bring consequences, if they raise electricity costs or cause water shortages down the road.

It’s part of a wider tension accompanying the infrastructure needed in the global artificial intelligence race. A Bloomberg investigation found that two-thirds of all new data centers are being built in water-stressed regions, like Nevada, where severe drought is a major concern.