{"id":174684,"date":"2025-12-04T12:30:07","date_gmt":"2025-12-04T12:30:07","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/174684\/"},"modified":"2025-12-04T12:30:07","modified_gmt":"2025-12-04T12:30:07","slug":"the-ai-boom-is-heralding-a-new-gold-rush-in-the-american-west-technology","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/174684\/","title":{"rendered":"The AI boom is heralding a new gold rush in the American west | Technology"},"content":{"rendered":"

Driving down the interstate through the dry Nevada<\/a> desert, there are few signs that a vast expanse of new construction is hiding behind the sagebrush-covered hills. But, just beyond a massive power plant and transmission towers that march up into the dusty brown mountains, lies one of the world\u2019s biggest buildouts of data centers \u2013 miles of new concrete buildings that house millions of computer servers.<\/p>\n

The Guardian\u2019s journalism is independent. We will earn a commission if you buy something through an affiliate link.\u00a0Learn more<\/a>.<\/p>\n

This business park, called the Tahoe-Reno Industrial Center, has a sprawling landmass greater than the city of Denver. It is home to the largest data center in the US, built by the company Switch, and tech giants like Google and Microsoft<\/a> have also bought land here and are constructing enormous facilities. A separate Apple data center complex is just down the road. Tesla\u2019s gigafactory, which builds electric vehicle batteries, is a resident too.<\/p>\n

In the mid-1800s, this area was an Old West boomtown. It\u2019s situated in Storey county where one of the largest deposits of gold and silver in the American west was discovered, lending it the name: \u201cThe Richest Place on Earth\u201d. It\u2019s where Mark Twain came to be a miner, then got his start as a writer for the local newspaper. He later wrote about it in his book Roughing It, saying: \u201cThe \u2018flush times\u2019 were in magnificent flower \u2026 money was as plenty as dust.\u201d<\/p>\n

The gold rush is long history, but Storey county is once again one of the fastest growing economies in Nevada. A new boom is happening here in the high desert \u2013 fueled by artificial intelligence.<\/p>\n

The burgeoning tech, which Silicon Valley vows will be the next frontier for humanity, is minting unfathomable trillion-dollar valuations<\/a>. It\u2019s a product that\u2019s still being tested, and there\u2019s uncertainty as to how exactly it will transform the economy. But that hasn\u2019t stopped its real-world infrastructure from being built at mass capacity and record speed \u2013 a frenzy buoyed by hundreds of billions in venture capital funding<\/a>.<\/p>\n

Desert vegetation with water from the Tahoe\u2011Reno Industrial Center\u2019s reservoir in the background.<\/p>\n

Microsoft, working with OpenAI, announced last month that it plans to double its data-center footprint<\/a> over the next two years. Amazon, partnering with Anthropic, just opened a major cluster<\/a> with plans for more. Google, Meta and Oracle are preparing vast buildouts, as is a consortium of companies<\/a> working with the Trump administration on a $500bn project called Stargate. In all, estimates by consulting firm McKinsey and Company peg global spending on AI data centers to total nearly $7tn by 2030<\/a> \u2013 nearly twice as much as the GDP of the UK.<\/p>\n

The buildup comes at a cost. As the planet\u2019s most powerful companies race to fulfill their dreams of artificial general intelligence \u2013 a futuristic version of AI that can perform tasks as well as humans \u2013 it means an ever-increasing need for computing power. AI requires far more energy and water than other internet tasks. A ChatGPT query needs nearly 10 times as much electricity<\/a> as an internet search without AI. And because supercomputers run hot, they typically need intensive water-cooling systems. As data centers continue to multiply in communities around the world \u2013 from Frankfurt to Johannesburg \u2013 AI\u2019s thirst for power and water shows no signs of letting up.<\/p>\n

In a place such as Storey county, which is on the frontline of the climate crisis<\/a> and has an average rainfall of roughly 11in a year, some locals fear the data centers\u2019 demands could decimate already scarce resources.<\/p>\n

That includes the Pyramid Lake Paiute, a Native American tribe, which has lived downriver from where the industrial center now sits, since long before Europeans arrived in the Americas.<\/p>\n

Switch data center at the Tahoe\u2011Reno Industrial Center.<\/p>\n

\u201cEveryone cannot keep moving to a space that has no resources. Nevada is completely over-allocated on its ground water resources. It\u2019s the driest state in the union,\u201d said Steven Wadsworth, the tribe\u2019s chairman. \u201cOur tribe\u2019s number one goal is protecting our resources. And it makes it difficult when we have partners upstream who are blissfully unaware.\u201d<\/p>\n

\u2018Miracle in the desert\u2019<\/p>\n

On a chilly fall day in October, Kris Thompson hopped into his SUV to take a drive. He has a gravelly voice and fading grey hair and works for Gilman Commercial Real Estate Service, which has been the industrial center\u2019s exclusive brokerage firm since its founding in 1998. As he turned onto USA Parkway, the 18-mile highway that cuts through the park, he pointed out the tall yellow cranes dotting the landscape and the constant stream of semi-trucks rumbling by. \u201cYou\u2019re gonna see a lot of hard hats and heavy equipment,\u201d he said.<\/p>\n

\u201cWhen I first came up here, there was nothing but desert dirt trails, coyotes, and rabbitbrush,\u201d Thompson said. \u201cNothing else was here. No roads, no water wells, no businesses, no drainage, no sewer system, nothing.\u201d<\/p>\n

Now, the entire area looks like a city being built from the ground up.<\/p>\n

\u201cHow do you take 160-sq-miles of desert, of high desert in the mountains, and turn that, 25 years later, into the hottest tech and data center development in the United States?\u201d Thompson asked rhetorically. \u201cThey had some cowboys up there, and they were willing to think outside the box.\u201d<\/p>\n

Satellite map showing the scale of the Tahoe Reno Industrial Center<\/a><\/p>\n

One of the cowboy masterminds is Lance Gilman, who also owns the Mustang Ranch brothel. He and his partners bought most of the property from the Gulf Oil company in the late 1990s, which had planned to use the expanse of land for a corporate hunting retreat.<\/p>\n

Gilman and his western crew were property developers who struck it big on what Thompson said \u201chas to be the greatest real estate deal ever made on the planet\u201d. They paid $20m to buy a vast private ranch \u2013 covering more than 100,000 acres \u2013 and created the Tahoe-Reno Industrial Center. It has no residential properties and pre-approves most industrial and commercial uses. Essentially, it can fast track the local government permit process.<\/p>\n

The center\u2019s swift permitting hooked Tesla<\/a> into setting up its first gigafactory there in 2014. The company bought 3,300 acres (13.4 sq km), which span an entire mountain, and immediately set to work building a 6m-sq-ft foundation (nearly 560,000 sq meters) for its battery facility. Tesla convinced the county to rename the road leading to its property, \u201cElectric Avenue\u201d.<\/p>\n

Pyramid Lake, at the Pyramid Lake Paiute Reservation, is fed by the Truckee River and is located about 40 miles north-east of Reno.<\/p>\n

\u201cThat put us up on the global stage,\u201d Thompson said of the mega-manufacturing facility. \u201cThat speed is everything. In this economy, if it takes you two or three years to get a permit to start building, your product could be obsolete by that point.\u201d<\/p>\n

Switch, which builds and operates some of the world\u2019s largest data centers and rents them to a variety of clients, came next, then Google, Microsoft and more. These companies purchased thousands of acres of land to build their data centers. Tract, which has a similar business model to Switch, purchased 11,000 total acres<\/a> (44.5 sq km) and pledged to invest $100bn<\/a> into its data center project.<\/p>\n

A Gold Rush-esque boom and bust has already come for the industrial park once before. One of the biggest buyers in 2018, four years before the release of ChatGPT, was multimillionaire Jeffrey Berns, who threw down $170m in cash to acquire 67,000 acres (271 sq km) \u2013 roughly two-thirds of the park \u2013 through his company Blockchains. His goal was to transform the place into a cryptocurrency utopia, which he described to the Guardian as having a \u201cblockchain based self-sovereign identity that eliminated the need for many politicians and governmental agencies\u201d.<\/p>\n

That plan didn\u2019t pan out. So, Blockchains sold 2,200 acres (8.9 sq km) to Tract<\/a> for $250m and plans to offer long-term leases on the remaining acreage. Berns said he\u2019s now focusing on building a billion-dollar bunker in Switzerland.<\/p>\n

Every square foot of Gilman\u2019s land at the industrial center has been sold, according to Thompson. What\u2019s available now are parcels that are being resold. Thompson said the fact that those cowboys were able to transform the dusty landscape into a \u201ctech city\u201d is nothing short of a \u201cmiracle in the desert\u201d.<\/p>\n

A water truck sprays near a construction site at the Tahoe\u2011Reno Industrial Center.<\/p>\n

Driving through the tech city, it\u2019s impossible to see the full extent of each company\u2019s construction projects. Google\u2019s complex is triple-fenced and only accessible by private roads. The same goes for other companies, some of which are buried behind desert mountains and towering walls. These businesses are notoriously secretive<\/a>, citing the need to protect trade secrets, and their security patrols don\u2019t take kindly to curious strangers.<\/p>\n

On three separate occasions, private guards told the Guardian to move along when parked on what seemed to be public roads. In one instance, a guard drove up and walked over to the driver-side window. \u201cWhat are you doing?\u201d he asked curtly. As he peered through the window, he smiled broadly and tilted his head, showing that he was wearing Meta\u2019s smart glasses with the red video recording light turned on.<\/p>\n

\u2018We know what happens when we don\u2019t fight for the water\u2019<\/p>\n

Pyramid Lake is the largest lake in Nevada. Situated at the base of several mountain ranges, the lake is owned by the Pyramid Lake Paiute Tribe and entirely surrounded by the tribe\u2019s reservation. They have lived in the region for thousands of years. The Pyramid Lake Paiute\u2019s petroglyphs date back 10,000 to 14,000 years BCE, the oldest in North America.<\/p>\n

Steven Wadsworth, chairman of the Pyramid Lake Paiute Tribe.<\/p>\n

Wadsworth, the tribal chairman, recognizes the need for data centers, but worries if the ones upriver aren\u2019t kept in check, they could intensify threats to the lake \u2013 which is the lifeblood for the tribe. The Truckee River supplies the industrial center with water and also serves as the primary source of water for Pyramid Lake.<\/p>\n

\u201cIt\u2019s not like we\u2019re out here to be a pain,\u201d Wadsworth said. \u201cWe know the destruction.\u201d<\/p>\n

In the tribe\u2019s governmental office, Wadsworth, sporting waist-length hair and a white button-up tucked into slacks, walked over to a giant satellite map showing the region\u2019s watershed \u2013 from California\u2019s mountains to Nevada\u2019s Great Basin. Next to the deep green of Pyramid Lake is a large, flat, white mass, the remnants of a second lake.<\/p>\n

\u201cWe know what happens when we don\u2019t fight for the water,\u201d Wadsworth said, pointing to the white mass. \u201cThis lake used to be full.\u201d<\/p>\n

Lake Winnemucca was once fed by Pyramid Lake, but when the Truckee River was dammed in the early 1900s, Wadsworth said it took less than 30 years for Pyramid Lake to drop 80ft and Lake Winnemucca to dry.<\/p>\n

The tribe has been fighting for decades now to protect Pyramid Lake and the native fish that inhabit it, including the endangered cui-ui and the threatened Lahontan cutthroat trout. Some of its efforts include purchasing thousands of acre-feet (one acre-foot is equivalent to 1,233 cubic meters) of water rights and bringing several lawsuits over the years. The tribe also lodged complaints with the local Truckee Meadows Water Authority to ensure any water the industrial park siphons from the river is replenished, according to the MIT Technology Review<\/a>.<\/p>\n

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AI data centers need copious amounts of water. Over the last 10 years, data center water use has tripled to more than 17bn gallons (64bn liters) of water per year in the US, according to a Department of Energy report<\/a>. Much of that is attributed to the \u201crapid proliferation of AI servers\u201d and is expected to multiply to nearly 80bn gallons (303bn liters) by 2028. While the figure pales against total US water use, 117tn gallons per year in 2015<\/a>, it still can mean a struggle to meet the demands of both human beings and hot computer chips.<\/p>\n

An area near the dry lake bed of what was once Lake Winnemucca.<\/a>An area near the dry lake bed of what was once Lake Winnemucca, near Nixon, Nevada.<\/p>\n

And as data centers continue to proliferate in water-stressed areas<\/a> around the globe, which can offer cheap land and energy as well as low humidity for easier chip cooling, one of the central concerns in local communities is what happens if the water runs dry.<\/p>\n

A large data center using evaporative water cooling consumes around 1m gallons a day, said Shaolei Ren, an associate professor at the University of California at Riverside. He studies AI water consumption and said non-evaporative water-cooling technology can diminish water use, but it\u2019s a balancing act because those systems need more electricity, which, in turn, requires more water.<\/p>\n

\u201cWater and energy are not separable,\u201d Ren said.<\/p>\n

The industrial park built a reclaimed water reservoir for its data center clients that went into operation in 2023. The project, which cost upwards of $100m, involved constructing a 21-mile pipeline to pump effluent from a wastewater treatment plant to the industrial park. While seen as an alternative to taking water directly from the Truckee River, Wadsworth said the effluent previously would\u2019ve been treated and deposited back into the river. So, the tribe still got involved to ensure the river maintained its flow.<\/p>\n

Some environmentalists question putting data centers in any drought-prone region<\/a>, especially as the climate crisis accelerates.<\/p>\n

Kyle Roerink, executive director of the Great Basin Water Network.<\/p>\n

\u201cThis place is being touted as the epicenter of the energy revolution, the data revolution, the tech revolution,\u201d said Kyle Roerink, the executive director of the Great Basin Water Network<\/a>, which works to protect water resources in the region. \u201cBut they\u2019re never going to be making water.\u201d<\/p>\n

\u2018We just don\u2019t have the power capacity\u2019<\/p>\n

The largest data center in the US is tucked into the industrial park. The sleek grey building with red accents is more than half a mile long, 1.3m-sq-ft, and has the capacity for 130 megawatts of electricity \u2013 enough to power 100,000 homes<\/a> a year. It\u2019s owned by Switch, the company\u2019s first data center in what is now a sprawling campus called \u201cThe Citadel.\u201d<\/p>\n

The entrance to the \u201cCitadel\u201d does give the impression of a fortress. Its entrance sits high on a giant pile of crushed rocks surrounded by 20-ft cement walls topped with dagger-like iron stakes. Guests drive in through a metal gate and security guards in bullet-proof vests hold visitors\u2019 IDs for the duration of their visit.<\/p>\n

The campus, which comes with its own power substation and water reservoir, has multiple gargantuan data centers terraced up into a valley, and Switch is building several more. The company says that when the Citadel is done, it will have approximately 10m-sq-ft (930,000 sq meters) of data centers combined.<\/p>\n

Inside Switch\u2019s biggest data center, Reno 1, noisy wall-sized fans blow air over the computers to keep them cool. Rows of identical servers behind black mesh gates line long aisles, an infinite, blinking hall of mirrors. The room is dimly lit except for the servers\u2019 blue and green LEDs as they perform incredibly complex computations.<\/p>\n

Power lines run along Interstate 80 outside Reno, Nevada.<\/p>\n

Data centers like this are cropping up worldwide, which means not only an intensified strain on water, but also power. Google wrote in its latest sustainability report<\/a> that it has seen a 51% increase in carbon emissions<\/a> in its operations since 2019, while Microsoft had a 23% increase<\/a> since 2020. Amazon<\/a> and Meta<\/a> also saw increases over the last few years, with rises of 33% and 64%, respectively. Some researchers say those are undercounts<\/a>.<\/p>\n

The International Energy Agency estimates total electricity consumption from data centers worldwide could double by 2026<\/a> from 2022 levels \u2013 roughly equaling the amount used per year as the entire country of Japan. In the US, about 60% of electricity comes from burning fossil fuels<\/a>, a predominant driver of the climate crisis.<\/p>\n

\u201cThese are large cities in terms of their electricity consumption,\u201d Ari Peskoe, the director of Harvard\u2019s Electricity Law Initiative, said of data centers. \u201cAnd then, utilities and other power generators are having a massive buildout of natural gas-fired power plants to support this growth.\u201d<\/p>\n

Some companies, like Elon Musk\u2019s xAI, have added huge temporary methane gas generators<\/a> to supply additional energy to their facilities. And, in data center-heavy regions across the US, plans to decommission coal plants<\/a> have been delayed to keep electricity flowing. Research analysts for Goldman Sachs say<\/a> they \u201cexpect the proliferation of AI technology, and the data centers necessary to feed it, to drive an increase in power demand the likes of which hasn\u2019t been seen in a generation\u201d.<\/p>\n

The power plant that serves the industrial center runs on natural gas and is owned by NV Energy, a utility acquired by Warren Buffett\u2019s Berkshire Hathaway in 2013. The utility has received regulatory approval for at least four new natural gas units over the last couple of years. Meghin Delaney, a company spokesperson, said NV Energy also has several renewable energy projects<\/a> and requires large energy users, like data centers, to \u201ccover transmission and distribution costs upfront before new projects are built\u201d.<\/p>\n

Google data center at the Tahoe\u2011Reno Industrial Center in Storey county, Nevada.<\/p>\n

One of Switch\u2019s focus is green design and energy efficiency<\/a>. The company says its data centers are completely powered by renewable energy and what it uses from natural gas facilities, it feeds back to the grid from solar and wind projects. Jason Hoffman, the chief strategy officer for Switch, said the company has spent more than \u201c$20bn in 100% green financing since 2024\u201d. Switch was also a major sponsor<\/a> of the reclaimed water reservoir at the industrial center.<\/p>\n

Google, Amazon, Microsoft, Meta and Apple are also tapping into solar and wind to fuel their data center ambitions. Some tech giants are investing in nuclear and geothermal energy. Apple says its data centers in the Reno area run entirely on solar<\/a> power.<\/p>\n

Tesla, Meta and Tract did not respond to requests for comment. Spokespeople for Microsoft, Apple and Amazon declined to comment but pointed the Guardian to their company\u2019s sustainability reports. Chrissy Moy, a Google<\/a> spokesperson, said the company uses air cooling in its Storey county data centers; and despite a rise in carbon emissions, she said Google saw a 12% reduction in data center energy emissions in 2024, which the company attributes to \u201cbringing new clean energy online\u201d.<\/p>\n

Kris Thompson points to a map of the Tahoe\u2011Reno Industrial Center in Storey county.<\/p>\n

On the reservation at Pyramid Lake, Wadsworth said rolling brownouts are common during the hot summer months. \u201cRight around 5 o\u2019clock, everybody gets home, and the power will dip multiple times,\u201d he said. He\u2019s concerned it will only get worse with the deluge of data centers, adding, \u201cWe just don\u2019t have the power capacity to keep running all of these things.\u201d<\/p>\n

Wild horses<\/p>\n

Back on the USA Parkway, Thompson steered his SUV through the industrial center\u2019s mountains. He said about 75% of the calls he now gets are from businesses wanting to secure land for data centers. Thompson has spent years on this land, and its development is a point of pride. So is its preservation. He looked out at the arid terrain gesturing to a cluster of scruffy pinyon pines and rabbitbrush that painted the hillside yellow with blooms. A pair of wild horses grazed nearby.<\/p>\n

Horses graze at the Tahoe\u2011Reno Industrial Center in Storey county, Nevada.<\/p>\n

Thompson said the park and its high-tech residents do what they can to protect the horses, which were originally brought to the Americas by Spanish conquistadors and now run wild throughout Nevada\u2019s deserts. The horses are seen by some as controversial<\/a>, as herds can overrun the hills, trampling the distinct natural landscape. But, in the industrial park, the tech companies love them, Thompson said.<\/p>\n

\u201cYou know, these tech rogues see themselves in the wild horses,\u201d Thompson said. \u201cThey\u2019re independent, they\u2019re running free, they\u2019re self-reliant, they\u2019re doing their own thing.\u201d Which sometimes means a trampling stampede.<\/p>\n","protected":false},"excerpt":{"rendered":"Driving down the interstate through the dry Nevada desert, there are few signs that a vast expanse of…\n","protected":false},"author":2,"featured_media":174685,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,61,60,80],"class_list":{"0":"post-174684","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-ie","12":"tag-ireland","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/174684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=174684"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/174684\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/174685"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=174684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=174684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=174684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}