Oct. 8, 2025, 4:26 PM EDTBy Bracey Harris, Aarne Heikkila and Steve PattersonRENO, Nev. — On the western edge of Nevada, it’s hard not to think about water. The driest state in the country is often hit by droughts, but that hasn’t stopped developers from buying up ranches and farmland to build homes or businesses.Today, Reno, “the Biggest Little City in the World,” is poised to become a new player in the nation’s data center construction boom. At least three data center projects have been approved since 2024, with more in a nearby industrial park. The giant computing facilities are essential to the internet as we know it, providing the digital infrastructure for cloud storage and for emerging artificial intelligence systems. They also require massive amounts of energy to run and often need hundreds of thousands of gallons of water to stay cool. Some community leaders, like Reno Vice Mayor Kathleen Taylor, have celebrated data centers, which can bring jobs and tax revenue. Earlier this year, officials projected a $25 million deficit in the upcoming budget year. But opponents argue that data centers can also bring consequences, if they raise electricity costs or cause water shortages down the road. For more on this story, watch “Hallie Jackson NOW” on NBC News NOW tonight at 5 p.m. ET/4 p.m. CT.It’s part of a wider tension accompanying the infrastructure needed in the global artificial intelligence race. A Bloomberg investigation found that two-thirds of all new data centers are being built in water-stressed regions, like Nevada, where severe drought is a major concern. Community members wary of the data center push have focused their attention on a vote this week that will decide whether developers of a new project on the outskirts of Reno can dramatically scale back its housing to allow more than half of its land to go to industrial uses — including data centers.Originally pitched as a cozy enclave of 5,000 homes with a scenic view, the new proposal would include roughly 12 million square feet for industrial and commercial use (up from 1.2 million square feet in the original proposal) and 1,350 housing units.“I’m not anti-data center,” said Olivia Tanager, director of the Toiyabe Chapter of the Sierra Club, who has spearheaded opposition to the revised proposal. “My organization is not anti-data center. But we are anti-huge amounts of potable water being gobbled up by data centers.”