At the edges of the AI data center boom, rural America is up against Silicon Valley billions | Fortune

Fifty miles west of Phoenix, the quiet desert around Hassayampa Ranch—home to saguaro, coyotes, and midnight stargazers—is being reimagined as one of the largest building blocks of the AI era: a vast campus of GPU-packed data halls pulling power at the scale of a city.

From open desert to hyperscale

Maricopa County supervisors recently approved industrial rezoning for roughly 2,000 acres at Hassayampa Ranch, advancing a plan to court a major cloud operator. The development team, led by Arizona land developer Anita Verma‑Lallian and backed by prominent tech investors, envisions a multibillion‑dollar complex with around 1.5 gigawatts of capacity—enough electricity for more than a million homes. Interest from multiple hyperscalers is already on the table, and the price tag could reach $25 billion.

What was once the most invisible piece of the internet—plain buildings humming in anonymity—has become impossible to miss. Generative AI’s compute appetite is transforming modest server farms into mega‑campuses spanning millions of square feet, with round‑the‑clock cooling needs and voracious energy demand. Across the country, these projects are redrawing maps, testing water supplies, and rattling local politics.

A national build‑out meets a local backlash

Both political parties are pushing to accelerate AI infrastructure as a pillar of U.S. competitiveness, even as debates flare over land, power, water, and who benefits. Critics warn that data centers inflate electricity bills and drain scarce aquifers; supporters point to jobs, tax bases, and the chance to anchor new industries. In community hearings from the Southeast to the Upper Midwest, proposals have triggered petitions, yard signs, and overflow meetings.

Tonopah, the rural community flanking Hassayampa Ranch, offers a snapshot of the fault lines. Longtime residents reliant on private wells worry that industrial drawdowns will imperil their only water source. Others fear traffic, noise, light pollution, and the erasure of a desert lifestyle built around night skies and open space. Local small businesses—from heritage poultry to dog breeders—say the shift from dirt roads to heavy truck corridors could upend livelihoods and ecosystems alike.

Water, power, and the rules that choose winners

Arizona’s water law looms large. A prior plan to build thousands of homes on the site stalled after state regulators tightened the issuance of “assured water supply” certificates for new subdivisions. Industrial users don’t face the same up‑front certificate requirements during zoning—even though their total consumption can rival residential communities—creating a regulatory pathway for data centers. Project attorneys say any water solution will comply with Phoenix Active Management Area rules and could include partnerships with a regional utility provider, tenant‑drilled wells, storage, and recycling systems. The site plan stage will reveal final usage and infrastructure details.

Electricity is the other gating factor. Hassayampa Ranch sits near the Palo Verde nuclear station and close to natural gas infrastructure, making co‑located generation plausible. The location’s scale is a draw too: at roughly 2,000 contiguous acres, it offers rare room to grow in a state where only a small share of land is privately held. As Phoenix’s West Valley has boomed, former farmland has steadily converted to logistics parks, housing, and now, AI infrastructure.

Billions chase the bottlenecks

For investors, land and power are the new choke points in the AI economy. The thesis is simple: compute capacity hinges on grid access and geography. Backers of the Hassayampa project describe data centers as the “wrapper” around energy, with value accruing where electrons and acreage intersect. Still, the sector is not risk‑free. If AI demand cools or consolidates, some campuses could pivot to advanced manufacturing or distribution—industrial shells are flexible, even if grid upgrades are not.

Community negotiations still to come

Developers say they plan setbacks from homes and preservation of natural washes that funnel monsoon rains. Site‑plan review—where neighbors can weigh in on building height, landscaping, view corridors, and buffers—will be the crucible for trust‑building. With one high‑profile data center recently rejected in a Phoenix suburb after public outcry, approvals are no longer a rubber stamp.

Ecology and energy: what “good” looks like

If the project advances, the environmental stakes are clear—and so are the tools to blunt them:

• Water: prioritize recycled/treated effluent, closed‑loop or hybrid cooling, and seasonal operations that shift load to cooler hours; publish independent water accounting with annual caps.
• Power: lock long‑term contracts for new renewable generation plus storage; use demand response so compute ramps down during grid stress; pursue on‑site solar canopies with battery backup.
• Heat and habitat: design with shaded courtyards, reflective roofs, and desert‑native landscaping to cut the heat‑island effect; maintain wildlife corridors and protect wash hydrology.
• Night skies: adopt dark‑sky lighting, low‑glare fixtures, and strict curfews for outdoor illumination.
• Community benefits: negotiate a binding agreement for road improvements, emergency services funding, job training, and utility bill protections for well‑owners.

A desert at a crossroads

Out here, the trade‑offs are intimate. Neighbors speak of lost Milky Way views and rising uncertainty about wells; developers emphasize regional growth and national competitiveness. Between them stands a desert ecosystem that survives on tight margins—heat, dust, and water measured in inches a year—now tasked with hosting one of the most power‑dense industries ever built.

Whether Hassayampa becomes a showcase for climate‑savvy computing or a flash point of rural resentment will hinge on the choices made in the months ahead: how the project sources every gallon and every watt, how it buffers light and sound, and how it shares prosperity with the people already rooted in the sand.