A bipartisan grassroots movement in Arizona is mobilizing against proposed hyperscale data centers, arguing the facilities would require scarce water and power while locals fear they may contribute little to their communities, a sharp contrast to the welcome given to TSMC’s semiconductor fab.
Newer data center proposals have faced backlash in Arizona, which has also courted industrial development. TSMC, the world’s leading chip producer, has brought more than 3,500 jobs to the state. Phoenix economic development official Christine Mackay spearheaded the effort to bring the Taiwanese company to Phoenix. But residents fear the newer, larger data centers proposed from Phoenix to Tucson will consume resources without contributing much to the community.
According to reporting from The Verge, the conflict crystallized in Tucson around Project Blue, a 600-megawatt data center proposed by Beale Infrastructure on a 290-acre site. In June 2025, Pima County Administrator Jan Lesher submitted a memo calling the project a $3.6 billion opportunity that would create 3,000 temporary construction jobs and 200 permanent positions, generate $152 million in tax revenue over a decade, and use “100% renewable water resources.” The developer promised to build an 18-mile pipe extension and an aquifer recharge facility at its own expense.
The project’s details emerged amid nondisclosure agreements. County officials had signed agreements with Beale, and the end client was reportedly Amazon Web Services. At a July 2025 public meeting, about 200 people attended; attendees were furious, worried or scared about the data center. A subsequent meeting at the Tucson Convention Center drew over 1,000 people, who booed throughout. Beale attorney Keri Silvyn told the crowd: “We all have cellphones, we have computers, a number of us have multiple of those in our households. ... The internet is housed in data centers. That’s what they are.”
Water was the central issue. Melanie Cooley, an education specialist at the Watershed Management Group, said: “Where we are sitting right now was a forest 125 years ago that adjoined a flowing river that flowed year-round. ... What we see today when we drive across that river that looks like a big, dry ditch, we take it as normal because it’s been that way for so long. But it isn’t normal. It’s a catastrophe. It’s a catastrophe that was brought on by overpumping of our groundwater and bad development decisions, and Project Blue is another bad development decision.” Another speaker cited past industrial projects including Raytheon and Hughes, saying they had contaminated the water.
The Tucson City Council voted unanimously to stop the annexation of the land, effectively killing the development. Three weeks later, local reporters confirmed Beale was moving forward anyway, although annexation was no longer an issue. The data center’s plan changed from water cooling to closed-loop air cooling, and Amazon reportedly pulled out as a tenant. Beale spokesperson Tony Burkart told The Verge: “The use of air-cooled technology for this project does not increase overall energy use; while the energy allocation is different, the energy use is the same.” The No Desert Data Center Coalition claims air-cooled facilities use more electricity and, since power plants use water for cooling, may be more water-intensive indirectly. Beale denies the allegation.
The county completed its deal with Beale on Christmas Eve, and Beale promised $15 million in donations, some of which would go toward local STEM and trade school programs.
Analysis
Why This Matters
- Arizona faces a looming water crisis, with its Colorado River allocation set to drop by nearly 30 percent, making data centers' water use a flashpoint.
- The conflict highlights a growing national backlash against AI and data center infrastructure, where communities weigh economic promises against resource costs.
- The outcome could set a precedent for other arid states grappling with similar development pressures.
Background
Arizona’s economy traditionally relied on the “five C’s”: cattle, copper, cotton, citrus, and climate. The state added a sixth, “chips,” after TSMC’s semiconductor fab began operations, bringing thousands of jobs and massive investment. The first wave of data centers drew little opposition, but the new hyperscale facilities are far larger and more resource-intensive, consuming up to 1.5 million gallons of water per day in some cases.
Key Perspectives
Economic developer Christine Mackay: The TSMC project was a deliberate, years-long effort that addressed the company's concerns, and early data centers were unobtrusive, looking “like pretty little office buildings.”
Beale Infrastructure: Project Blue would use “100% renewable water resources,” build critical infrastructure at its own expense, and eventually be “water-positive.”
Local activists and residents: Data centers consume vast amounts of water and electricity while providing few jobs, and the secrecy around the deals undermines trust. One speaker asked Beale representatives: “Can you guarantee us water for future generations?”
Pima County Supervisor Rex Scott: “The boost it could provide to our local economy may well be transformative.”
What to Watch
- Whether Beale secures a new tenant after Amazon pulled out, and whether construction proceeds without a tenant.
- The impact of the new Tucson city rules for data centers and large water users on future proposals.
- How other Arizona communities, especially in Phoenix, respond to upcoming data center applications.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedArizona’s data center backlash centers on water concerns.The Verge: “new developments are facing mass backlash in Arizona, where a grassroots, surprisingly bipartisan coalition of residents has united against data centers.”
- Partly supportedArizona residents oppose hyperscale developments, citing scarce water and developers’ promises of local benefits.The Verge: “In Arizona and elsewhere, data center developers have tried to win over locals by making enticing promises about the jobs, tax revenue, and infrastructure they’ll bring with them.”
- SupportedA bipartisan grassroots movement in Arizona is mobilizing against proposed hyperscale data centers.The Verge: “a grassroots, surprisingly bipartisan coalition of residents has united against data centers.”
- SupportedThe movement argues the facilities would require scarce water and power.The Verge: “The newer, larger developments being proposed from Phoenix to Tucson demand more of everything — more water, more power, more land — than Arizonans are willing to give.”
- SupportedLocals fear the newer data centers may contribute little to their communities, unlike the welcome given to TSMC.The Verge: “Locals fear that the new hyperscale data center developments will do the former but not the latter, consuming resources while contributing little to the community.”
- SupportedTSMC has brought more than 3,500 jobs to Arizona.The Verge: “TSMC has brought more than 3,500 jobs to the state”
- SupportedPima County Administrator Jan Lesher’s memo described Project Blue as a $3.6 billion opportunity.The Verge: “This data center would provide an “unprecedented” $3.6 billion opportunity for Tucson and for the county.”
- SupportedBeale attorney Keri Silvyn said, “We all have cellphones, we have computers, a number of us have multiple of those in our households. ... The internet is housed in data centers. That’s what they are.”The Verge: ““We all have cellphones, we have computers, a number of us have multiple of those in our households,” she said. “Many of the various signs that I’ve seen have QR codes, that if you click on, will take you through a data center in order to get to different sites. The internet is housed in data centers. That’s what they are.””
- SupportedMelanie Cooley said, “Where we are sitting right now was a forest 125 years ago that adjoined a flowing river that flowed year-round.”The Verge: ““Where we are sitting right now was a forest 125 years ago that adjoined a flowing river that flowed year-round,” she said.”
- SupportedThe Tucson City Council voted unanimously to stop the annexation, effectively killing the development.The Verge: “Two days after this contentious hearing, a unanimous vote by the Tucson City Council shut down the annexation of the land.”
- SupportedBeale spokesperson Tony Burkart said, “The use of air-cooled technology for this project does not increase overall energy use; while the energy allocation is different, the energy use is the same.”The Verge: ““The use of air-cooled technology for this project does not increase overall energy use; while the energy allocation is different, the energy use is the same,” Beale spokesperson Tony Burkart, the Beale spokesperson, told The Verge.”
- SupportedAmazon reportedly pulled out as a tenant of Project Blue.The Verge: “The change also cost Beale a tenant: Amazon reportedly pulled out of the project, saying an air-cooled facility wouldn’t meet its needs.”