Arizona AI Boom Under Threat From Dwindling Colorado River (1)

Arizona’s water-reliant data centers powering the artificial intelligence surge are expanding rapidly — just as the state faces shrinking supplies amid a climate-driven water crisis.

AI projects under construction in the state could spike data center water demand 67% to 5 billion gallons annually in coming years, Bloomberg Intelligence predicts, based on its modeling of industry and government data.

Some developers have more than a third of their project pipeline in Arizona, but water availability and community opposition will increasingly affect the tech industry’s competitiveness in the state, said Bloomberg Intelligence analyst Melanie Rua.

Many of the facilities are concentrated in ...