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By Amanda Castro

Associate News Editor

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Forty mayors have unveiled a new global pact to rein in how AI‑driven data centers are built and operated in major cities.

The move matters now because local leaders say soaring electricity and water demands from these facilities are already straining grids, raising costs and threatening climate goals. The pact could reshape where data centers are allowed, how they use resources, and what obligations developers must meet as cities prepare for rapid AI expansion.

The agreement, launched by C40 Cities during London Climate Action Week, lays out a shared framework for siting, powering and regulating urban data centers amid mounting political pushback, community concerns and accelerating development pressures.

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Pact Aims to Curb Resource Strain From AI Data Centers

The mayors’ pact responds to a surge in AI‑related infrastructure that consumes vast amounts of electricity and water, often competing with housing and other essential development. C40 says its member cities already host roughly 1,700 data centers, with growth expected to exceed 40n percent in 50 of them.

The initiative began after the mayors of Phoenix and Melbourne raised alarms about data centers’ escalating demands on local utilities and land. Cassie Sutherland, a managing director at C40, said cities worldwide reported “very similar” challenges and needed a unified voice to set conditions for responsible development.

Why Cities Are Pushing Back

Urban data centers are typically built close to companies that rely on AI systems requiring near‑instant processing. But their rapid expansion has triggered:

• fears of blackouts
• rising electricity bills
• heavy water consumption
• competition for buildable land
• political pressure to pause or restrict new projects

Some states have already suspended tax incentives or considered moratoriums on new data center construction.

What the Pact Calls For

The framework urges cities to adopt standards requiring that data centers:

• be built on abandoned or underused land
• minimize noise, heat and air pollution
• run on renewable energy with battery storage
• sharply reduce water use and emissions
• capture and reuse waste heat
• invest in local jobs, infrastructure upgrades and community engagement

Because mayors cannot impose all regulations alone, the pact emphasizes collaboration with utilities, national governments and private developers.

Phoenix: A Top Data Center Market Under Pressure

Phoenix is already one of North America’s largest data center hubs, and pending permit requests could double the region’s electricity demand. Mayor Kate Gallego said she supports innovation but warned that current development patterns risk worsening climate impacts and leaving communities behind.

“We just want to make sure that we get it right for our local residents and for the health of our planet,” she said.

Meanwhile, Melbourne projects that its planned data centers could consume 20 billion liters of water annually—about 4 percent of the city’s drinking supply. With climate‑driven heat and population growth already straining resources, Mayor Nicholas Reece said cities must avoid a “race to the bottom” where governments chase investment without safeguards.

Full List of Cities Signing the Pact

United States (about half of all signatories):

• Seattle
• Palo Alto
• Riverside
• Phoenix
• Albuquerque
• Beverly (MA)
• Lincoln (NE)
• Chicago
• Cleveland
• Miami

Canada

• Montreal

Europe

Cities in:

• Greece
• Spain
• Italy
• Germany
• United Kingdom
• Norway

Africa

Cities in:

• Ivory Coast
• Sierra Leone
• South Africa
• Kenya

Asia-Pacific

Cities in:

• India
• Australia

Middle East

• Lebanon

Southeast Asia’s Missing Signatures

No Southeast Asian cities have signed on yet, citing national‑level constraints.

The region hosts more than 2,000 data centers, and its energy demand is expected to more than double within five years, driven by major investments from companies like Microsoft, Google and Nvidia.

What Happens Next

Each city will translate the pact into its own regulations or guidelines, shaping how future data centers are approved and operated.

The framework could influence global standards as AI infrastructure accelerates and communities demand stronger protections.

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