The AI boom is spreading data centers around the world faster than most tech projects. The AI’s lifelines run on two important sources, water and electricity, which they draw from the areas they are in.
This often leads to a fight between the locals and the tech giant that owns the data center since resources are limited and the need is not.An example is the artificial intelligence data center being built in Southern California’s Imperial Valley. The 330-megawatt unit, considered the state’s largest AI data center, had previously promised not to use water from the Colorado River. But now, the developer behind the project is suing to get water from the river that is already a threatened source of fresh water for 40 million people and the center of countless controversies over water use in the West.
The Colorado River is the only source of fresh water in the Imperial Valley, which has long faced drought and water supply problems. It is also the largest user of water in the seven states that depend on the river. Farmers use about 80% of the state’s full allotment.The lawsuit, filed by Imperial Valley Computer Manufacturing in June 2026, says the company needs access to 287 million gallons of water for the data center.
It was introduced after two cities, El Centro and Imperial, rejected a bid to source recycled wastewater to cool the proposed data center. The Imperial Irrigation District, a local agency that delivers Colorado River water in the Imperial Valley, denied the company’s request to provide water for the project.
It is also accompanied by a backlash from communities across the United States against data centers. People in the Imperial Valley have called in data centers.
At a late March meeting covered by KPBS News in California, the audience went wild as Rucci spoke, and the board went into recess.The project would not increase demand on the river overall because the company would abandon nearby farmland or stop irrigating it and use that water to cool the data center instead, said the developer, Sebastian Rucci, a Huntington Beach attorney and businessman pushing the plan. The proposal would have no impact because the data center would not require any additional allocation from the Colorado River, he said, adding that water demand would be similar to a 160-acre farm.
However, the developer backed away from its statement that it does not intend to use water from the over-allocated Colorado River.For water experts and local advocates, the issue raises a bigger question than how much water a single data center should use. As water scarcity increases and demand for new industries increases, should water historically used in agriculture be redirected to support the AI boom?
From agriculture to data centers?
The Imperial Valley is famous for agriculture, with cattle, lettuce, and spinach among its most important commodities.
“Taking land out of agricultural production to use for other things is a matter of values, even if it’s a small amount,” John Fleck, an author and water policy expert at the University of New Mexico, told Business Insider.Michael Cohen, a senior fellow at the Pacific Institute who focuses on Colorado River Basin water use, said the issue isn’t necessarily the amount of water, but rather the developer’s plan to access farmland, drain it and rezone it for industrial use.The Imperial Valley’s economy has long relied on agriculture on the Colorado River. If it weren’t for that part of the country around Imperial and Yuma, Arizona, “no one in America would have been able to buy a salad in February,” said Rhett Larson, a water law expert at Arizona State University. While farmers may make money selling land or water rights, he added, the people who often get hurt are fertilizer salesmen, tractor repairmen, teachers, dry cleaners, or anyone in these rural communities who doesn’t have land or water rights to sell.
Bright future?
Rucci said his company has a contract to buy land and water from farmers. He also said he pursued this strategy after his proposals to use reclaimed water were rejected. He added that the data center would bring significant economic benefits to Imperial County, including 1,688 construction jobs, more than a hundred permanent jobs, and an estimated $2.95 billion in economic improvement over 30 years, citing an independent economic study prepared for the county.
While individual landowners may benefit from this practice, taking farmland out of production can have ripple effects in farming communities, including fewer farm-related jobs.“Economic diversification is exactly what the region needs,” Rucci said in an emailed statement to the outlet, citing high unemployment rates in Imperial County. The county’s unemployment rate was about 17% as of May, according to state data.Eric Reyes, an Imperial Valley resident and executive director at the advocacy organization Los Amigos de la Comunidad, said he is concerned that the lawsuit is an attempt to defraud the Imperial Irrigation District (IDD), a publicly owned facility governed by an elected board that has long held water rights in the area, rather than individual landowners. He said the developer’s plan “raised a big red flag” because it could involve “a private deal with the landowner and then using it for his own purposes.”
“However, Rucci rejected the idea that the company is trying to circumvent IID control, and said farmers have the right under state law to allocate water, and that the proposals would not require “one additional drop” from the Colorado River.“The Colorado River Basin has to decide what we want to be when we grow up and what it will take to get there,” Larson said. “We have enough water to do a lot of great things. But we don’t have enough water to do every good thing.”
