Marco Werman: How big of an increase in these lawsuits are we looking at?

Eoin Jackson:So far, we’ve seen a significant increase since approximately 2020. And as you’ve noted, the rise of AI in the past two to three years has further increased the rate of data center litigation as the rate of data center construction has gone up across the world. And in turn, litigation is slow. It takes time to reach the courts. We’re now seeing the courts issue their first decisions, saying, in effect, that data centers must take account of environmental and climate impacts during their construction and throughout their operations.

I mean, anecdotally, I want to say the data center debate seemed to start a little more than a year and a half ago with the rapid rise of AI technology. But in terms of lawsuits taking them on, did you see a sudden recent jump?

The first identifiable case to challenge a data center on climate grounds we’ve identified as being one from Chile in 2020. This was in relation to a project being undertaken by Google. The court in that case said that the data center must take account of its climate impacts if it was to go ahead. So, even in 2020, big tech was already trying to increase their use of data centers. But of course, the rise of AI has effectively supercharged the demand for them. And as a result, courts in Ireland, in the United Kingdom, in California are increasingly being forced to consider these questions and determine whether and how to balance the demand for AI and the demand for data centers with the underlying environmental, climate and health concerns.

What was the big issue that concerned people in that community in Chile? Was it water, electricity?

The primary concern was to do with the level of water consumption. The local residents were concerned that the data center would in effect take up a lot of the city’s water supply. And furthermore, that water supply was already under threat as a result of climate change. So, their argument was that in granting permission for that data center, there had been a failure to consider both the impact on the water supply to the local community and, in turn, the impact of climate change on that water supply on the whole, creating kind of a dual challenge for the community.

Obviously, each case is going to be different based on the country, the legal system, the project involved, but are there any trends that you’re seeing across these lawsuits? Like similarities in what’s being argued?

There are certainly a lot of similarities. There are a lot of efforts to highlight the local environmental impacts that data centers can have. Cases in the UK, in Ireland, in Virginia have all cited, for example, the impacts on water consumption. Increasingly, we are seeing efforts to highlight the climate impacts of these data centers. So, litigators in California, the UK, Chile have all noted that the use of fossil fuels by these data centers will compromise our efforts to stay below 1.5 degrees Celsius as part of our global, national and regional climate commitments. So, there’s an increased recognition that data centers pose a significant environmental threat. And as you noted, how courts deal with this will depend entirely on which jurisdiction we are in, but litigators are often arriving at the same conclusions and bringing the same set of arguments to the courts.

Well, we’re seeing a lot of this in Southern California with a big debate over a data center in the desert, which is obviously water-deprived. I’m curious, what has been the success rate of legal pushback in these cases?

The success rate remains to be determined. We’ve seen some individual successes in Chile, but many of the cases in question remain pending. And thus far, it’s a little bit too early to say what the exact success rate will be.

Also, I’m wondering, data center developers, if they face lawsuits, do they simply look for other places that are amenable to putting one up in their backyard?

Yes. And this is one of the challenges when you’re dealing with big tech companies that operate all over the globe. As we see challenges develop across different states, there is a likelihood that big tech will move data center applications to other states within the US. More generally, we’ve seen places like Ireland in Europe become a major hub due, in part, to relatively lax regulation on the part of the Irish government. So, oftentimes this litigation can become, in effect, playing whack-a-mole. You might knock out one, but it’s very likely that the tech company or the relevant developer will simply move to another location.

Eoin, your analysis of what’s going on with the lawsuits and everything else you’ve been sharing with us, what does this information tell you about the global prevalence of data centers?

It tells us that the more we use AI and the more reliance there is on AI, the more people are also becoming aware of the significant health impacts, environmental concerns, climate concerns that might come with the data centers needed to power AI. Some of these concerns can be addressed. What we’re seeing right now is a failure to put those mitigation and adaptation measures in place and, in turn, a shift to using the courts as a basis to try to force these companies these developers, these planning commissioners to try to integrate these concerns into their approval of these data centers.

You know, Eoin, I see people now regularly and casually asking questions into their phones and getting their answers seconds later. The convenience of AI is undeniable, but you’ve also highlighted the big downsides: health, climate, environment. So, is this a challenge as you see it, convenience versus real quality-of-life issues? And in the long run, who wins?

That’s a great question. I think this is a challenge with solutions that are available to us already. We can, for example, ensure that data centers are approved in appropriate places with appropriate consultations with the local community. We can ensure that data centers run on renewable sources of electricity, and we can ensure that the environmental impacts of data centers are recognized, considered and protected against. The problem right now is we are simply not doing that. So that is largely down to convenience. It is also down in part to a failure on the part of regulators and politicians to take adequate account of these impacts. But this kind of litigation can help to raise awareness of these impacts and raise awareness of the solutions that already exist and that can be put in place to mitigate against some of the harm.