What are data centers? How AI is driving massive growth, energy demand and community pushback

Every time you ask your phone a question, upload a photo, or use an AI chatbot, the data is often described as going "to the cloud."

But the cloud is not some abstract place in the sky.

It's inside machines running 24/7 from thousands of windowless buildings across the country, what we call data centers. 

Depending on how they're counted, there are more than 3,000 operating data centers in the United States, with hundreds more under construction or planned, especially in places like Texas and Virginia.

And that has people upset.

A May 2026 Gallup poll found seven in 10 Americans oppose constructing data centers for artificial intelligence in their local area.

But the question is not just whether data centers are good or bad. The better questions are: Who benefits from them? Who has to pay for them? And who gets stuck living next door?

What is a data center?

Simply put, data centers are massive warehouses that house thousands of computer servers.

Near Amarillo, developers have proposed a roughly 5,800-acre AI and data center campus, an area of about 9 square miles.

Data centers are not new. We've had computer rooms and data processing centers for decades.

What is new is what we're asking them to do. For years, data centers were primarily used to store and process information. AI dramatically expanded those demands.

We are now asking computers to predict, translate languages, write code, generate images and video, and perform increasingly complex AI tasks. And all that takes a lot of computing, which means a lot of electricity.

Can the Texas power grid keep up with data center electricity demand?

According to Goldman Sachs Research, U.S. data center power demand is forecasted to more than double from 31 gigawatts in 2025 to 66 gigawatts in 2027.

For context, that's roughly enough electricity to power tens of millions of American homes.

Texas is expected to be one of the nation's largest sources of new data center power demand. The growth is fueling debate in a state where the devastating 2021 winter storm raised lasting questions about the grid's ability to meet future demand.

Now, with AI driving a surge in data center development, those questions are resurfacing. Yet some analysts say Texas may be better positioned than many other states because significant amounts of new generation are expected to come online in the coming years.

Think of the power grid as a highway. Data centers add new traffic. In some regions, that traffic could strain the grid. In Texas, planners are counting on new generating capacity to add lanes to the system and help accommodate the growth.

But some say those extra lanes may not be a good thing, because some of those new lanes may be power plants fueled by natural gas.

The Environmental Integrity Project, a nonprofit environmental watchdog group, says at least 74 natural gas-fired power plants are proposed nationwide to supply electricity directly to data centers. Thirty-two are planned in Texas, and the organization estimates they could emit more than 287 million tons of greenhouse gases annually if built and operated at maximum capacity. That's the same as adding 61 million more gas-powered cars to the road.

However, not every proposed power plant will be built, and they will not all run at maximum capacity all the time.

Plus, companies and some policymakers say that if data centers build their own power and grid upgrades, regular customers do not have to pay for those costs.

Does Texas have enough water to supply all these data centers? 

The concerns over data centers do not stop at electricity; water is a worry, too.

Imagine someone tells you a new industry is moving into Texas, and you ask how much water it will need. A 2026 analysis by the Houston Advanced Research Center estimates data centers could consume anywhere from 29 billion to 161 billion gallons of water a year by 2030. Two very different figures.

But studies say that gap exists because water use varies dramatically depending on the cooling technology, local climate and energy source. An efficient cooling system can significantly reduce water use, while water-intensive cooling systems can increase it.

Energy sources matter, too: wind and solar generally require less water than power generated by natural gas plants, which typically need additional cooling water.

And when it comes to water, context matters. 

Nationwide, researchers estimate data centers are responsible for roughly 228 billion gallons of water consumption annually when both on-site cooling and the water used to generate their electricity are included.

That's a lot. But for comparison, golf courses use an estimated 531 billion gallons of water each year, leaking water pipes account for roughly 900 billion gallons, and residential toilets use about 1.3 trillion gallons annually.

The data center industry points to those comparisons when arguing that its water use remains relatively small. And even the higher estimate from the Houston Advanced Research Center, 161 billion gallons annually in Texas by 2030, would amount to about 2.7% of the state's total yearly water use.

But water is not distributed evenly across Texas. Data center impacts are concentrated in the communities where facilities are built, making local water supplies far more important than statewide averages.

So the real question is where do we put them?

Who has to live next door to data centers?

In Texas, most data centers are built in rural communities where land is cheap, there is access to big power infrastructure and where there are fewer zoning restrictions. But many of these communities don't want them. In Hood County, Texas, just west of Fort Worth, residents have been fighting multiple proposed data center projects.

For families, it's not just about the abstract. It's about what's happening on the other side of their fence. It's about protecting the water that supplies their streams and that they need for their livestock.

As demand for AI grows, data centers are becoming a larger part of everyday life, turning questions about electricity, water, and land use into debates playing out in communities across Texas and the nation.