Colorado lawmakers weigh in on A.I. data centers and the impact for rural & ag communities

Artificial intelligence and cloud computing are driving rapid growth in data centers across the country — and now Colorado lawmakers are weighing how to manage that impact.

These facilities require massive amounts of electricity and water, raising concerns about higher utility bills, strained water supplies, and increased reliance on fossil fuels.

One proposal at the state capitol — Senate Bill 102 — would require data centers to track and report water usage, tap into new renewable energy sources like wind and solar, and cover the full cost of their energy demand, including grid expansion.

Supporters say it’s a necessary step to protect Colorado’s resources. But opponents argue the bill could push the fast-growing AI industry — and potential jobs — to other states.

Experts say the job impact may be overstated, noting that while data centers do create construction jobs, long-term employment opportunities are limited — and often don’t go to local residents.

Also, where data centers are built matters — especially in rural or agricultural communities, where water demand could strain local aquifers.

Meanwhile, the proposal stands in sharp contrast to an earlier bill that would have given data centers major tax breaks for up to 20 years — a plan critics called irresponsible as the state faces a budget shortfall of more than one-and-a-half billion dollars.

Many everyday digital activities, even social media posts, rely on the very data centers that some oppose.