Local pushback is hardening against large AI data centers in the Phoenix metro, with Chandler already killing a $2.5 billion, 422,000-square-foot project after intense public opposition.
The new flashpoint is Project Baccara, a 160-acre campus outside Surprise with two data center buildings and natural gas generators targeting roughly 700 MW of power.
Surprise officials want a deep impact review on air quality, noise, traffic, and water, signaling that even unincorporated sites face city-level scrutiny.
A proposed Arizona Public Service rate hike that specifically hits data centers harder adds another operational headwind to power-intensive AI builds in the region.
Layer in rising water and wastewater rates plus broader regional water anxiety, and the total cost of ownership story for hyperscale AI in the Valley is getting more complicated.
Vendors and operators eyeing Phoenix for GPU-heavy builds now need to plan for political risk, permit friction, and higher all-in energy and water costs, not just cheap land and sun.
The piece is worth a full read if you are modeling AI data center siting and regulatory risk in fast-growing desert markets.
Source: Valley data center project faces scrutiny – KTAR.com
