San Jose Residents and Green Groups Oppose Data Center Projects for AI Hub

Reuters reported on Sept. 17 that residents and environmental groups in San Jose, the largest city in Silicon Valley, are organizing against a batch of data center projects that officials have courted to turn the city into an "AI infrastructure hub."

San Jose, with nearly 1 million residents, is California's third-largest city. In 2025, local leaders announced an agreement with utility PG&E to speed up power delivery to large energy users such as data centers. City officials estimate each new facility could generate $3 million to $6 million in annual tax revenue for public services including police, fire, libraries, roads and parks.

Many residents remain skeptical that the tech growth driven by AI-focused facilities will bring broadly shared benefits. Ellina Yin, leader of the coalition "I Love San Jose," said companies must prove they are worth the community's resources and explain how they will give back. The coalition is pushing for stronger public review, more transparency on energy and water use, and studies of potential health and environmental impacts before more projects are approved.

Mayor Matt Mahan said the answer is not to halt data center development but to ensure it proceeds responsibly. "People have legitimate questions: Will this raise my energy costs? Will it consume our clean water supply? Will it reduce quality of life in my city? These are very reasonable questions," he told Reuters.

The dispute comes as California Governor Gavin Newsom weighs a package of bills designed to protect residents from data center power costs and increase transparency on energy and water usage. PG&E said large new customers help spread fixed grid costs across a broader customer base and lower bills. In April 2026, a coalition led by the Center for Biological Diversity petitioned Bay Area air quality regulators to strengthen oversight of diesel backup generators used by data centers. The Data Center Coalition protested the bills, arguing they unfairly single out data centers and could deter investment, pushing jobs and tax revenue to other states.