Governor Gavin Newsom of California has vetoed a proposal that would have required data centers to report their water usage, despite his continued advocacy for tackling the state’s water shortages. Assembly Bill 93 aimed to mandate data center operators to forecast their water usage to suppliers before obtaining business licenses and to submit annual consumption reports for permit renewals. Newsom, however, refrained from signing the bill, citing concerns over stringent reporting requisites affecting business operations. In his letter to the State Assembly, Newsom expressed a hesitation to enforce such requirements without fully assessing business and technology user impacts. He highlighted the booming demand for data center infrastructure, fueled by AI advancements, and California’s strategic role in fostering this sector’s growth.

Supporters of the bill, like Assembly Member Diane Papan, argued that it would empower the Department of Water Resources to appropriately categorize and regulate data centers based on water consumption. With persistent water challenges in California—evidenced by the latest US Drought Monitor map showing areas of extreme drought—the debate over data center water use is becoming increasingly critical.

While announcing new reservoir projects, Newsom emphasized the urgency of protecting California from water shortages, urging legislative priorities on water management. The discourse on data center water consumption is not limited to California; European regions also faced scrutiny over water availability for AI training infrastructure. The European Commission has responded with a water resilience strategy, although concerns remain about potentially driving data centers out of Europe due to restrictive water regulations.