Generative AI is driving a boom in new data center development, with large new projects going up across the U.S. At the same time, the IT equipment needed for AI training and inference is more energy- and water-intensive than what is required for traditional data center uses such as cloud computing. Major tech firms have largely deferred earlier plans to reduce their carbon emissions during the current race to build out the infrastructure needed for future AI models but state and local authorities and utility companies have increased their scrutiny of the demands that new data center projects place on power and water resources, and local community concerns about the noise produced by data center equipment remain a perennial challenge for developers.

“Managing Sustainability Risk in Data Center Development” by Jeremy Gabe, Ph.D., and Phil Isaak, will examine approaches to balancing three competing concerns: meeting market requirements, acquiring adequate power, and managing near-term and long-term sustainability risk – the liability that issues related to a project’s real or perceived sustainability will result in a financial loss. The report will draw on interviews with data center owners, operators, investors, developers and designers and will be released in December 2025.

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