New AI data center law could hurt industry, NJ business leaders say

🔴 A single AI data center could consume 5 million gallons of water daily

🔴 New Jersey wants to make them report water consumption

🔴 Opponents say the measure is redundant, could hurt industry

A bill sitting on Gov. Phil Murphy's desk requires new thirsty AI data centers to disclose how much water and electricity they use, but it's getting pushback from New Jersey's top business leaders.

The legislation (S4293/A5548) passed in the state legislature on June 30.

The reports to the state Board of Public Utilities would have to be made quarterly, according to Sen. Bob Smith, D-Middlesex, who chairs the Senate Environment and Energy Committee.

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Smith said these "monsters" can use 3 million gallons of water just for cooling every day.

While environmentalist groups approve of keeping a close eye on these massive AI  data centers that are driving up electricity costs throughout New Jersey, some business leaders are against the measure.

Why not track the resource consumption of AI data centers?

The New Jersey Business & Industry Association wants Gov. Murphy to veto the bill, which has reached his desk.

Ray Cantor, the NJBIA's deputy chief of government affairs, says the bill is unnecessary; the state Department of Environmental Protection already handles water usage permits and the BPU tracks electricity usage.

According to the NJBIA, the bill is based on a "false narrative" that AI data centers harm the environment and the surrounding communities.

"This legislation sends the wrong message to our business community and unintentionally vilifies data centers and the great resources they provide," Cantor said.

AI data centers can guzzle 5 million gallons of water per day

However, taking 5 million gallons daily from any water source will impact nearby homes and businesses, according to Doug O’Malley, the director of Environment New Jersey.

That's between liquid cooling and the water consumed to generate the energy that powers them. Some AI data centers require 300 MW of electricity, which is equal to the output of a small modular nuclear reactor.

O'Malley says these facilities, which he calls water hogs, can only further strain on the state's water supply.

"Imagine your typical community and suddenly you have an allocation of 5 million more gallons. That's why we can't just rely on what we have right now," O'Malley said.

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