The Terra Ventures Data Center in San Jose, California, is expected to be completed in 2027. The facility will channel fuel cell exhaust to generate chilled water, reducing cooling demand by up to 70 percent. It will also direct carbon dioxide into an on-site greenhouse where crops will be grown—effectively turning waste into value for the local community.
(Arcadis)
Every time someone streams content, shops online, or runs an AI query, a data center powers that action. These massive buildings, located in rural, suburban, and city settings, form the backbone of our digital world and have become central to economic and technological transformations around the globe. By fueling growth in cloud computing, AI, and digital services, data centers are reshaping regional and national economies through the creation of skilled jobs—more than 600,000 workers in the U.S. alone, generating more than $400 billion in labor income for communities, according to the Data Center Coalition.
Recent reports from global real estate firm CBRE indicate that between 2023 and 2024, data center inventory increased by more than 20 percent in North America, Europe, and the Asia-Pacific region. Global demand for cloud infrastructure alone now requires an additional 50 gigawatts of power—enough to light hundreds of millions of homes—and that demand is projected to triple or even quadruple over the next decade.
In response to this rapid expansion, federal and state policymakers are updating regulations to address the emerging challenges posed by data centers. For example, the White House issued an executive order in July 2025 to streamline permitting for AI data centers and associated infrastructure. On the state level, California’s Senate Bill 57 aims to mitigate the impact of data center energy consumption on residential utility rates.
Data centers entail a massive carbon footprint, both physically and operationally, and have often been criticized for their significant energy consumption. The environmental consequences have become even more acute with the rise of AI, which requires enormous computing power and cooling. Cities, designers, and policymakers now face the urgent challenge of reimagining these resource-intensive facilities so that they can meet rising energy demands while mitigating climate pressures, ensuring these buildings enhance their immediate environments rather than compromise them.
The Terra Ventures Data Center in San Jose, California, exemplifies this socially responsible approach. Expected to be completed in 2027, the new facility aims to showcase how careful planning can meet both global demand and local responsibility. To reduce emissions, it will operate on a natural gas-powered fuel cell microgrid, eliminating the need for backup diesel generators and bulky battery systems. The facility will even feed surplus power back into the local grid, helping prevent brownouts and blackouts during periods of high demand.
Arcadis designed the facility to reuse every possible byproduct. The data center will channel fuel cell exhaust to generate chilled water, reducing cooling demand by up to 70 percent. It will direct carbon dioxide into an on-site greenhouse where crops will be grown—effectively turning waste into value. For San Jose residents, Terra Ventures will offer more than a secure warehouse of servers; it will be a reliable local energy partner, an agricultural resource, and proof that digital infrastructure can contribute to community resilience.
Overcoming Roadblocks
The rapid boom of data centers has exposed vulnerabilities across urban planning, prompting stakeholders to reassess how these facilities are integrated into their surrounding environments. Residents often push back against such developments, citing concerns about noise, heat production, and limited local payoff. To them, a giant, windowless “black box” seems more disruptive than beneficial. These realities are forcing developers to choose between building the old way, amid escalating resistance, or redesigning facilities that reflect sustainable priorities and deliver tangible value to the community.
To that end, innovative solutions are emerging to allow flexible expansion without overwhelming the local utilities. These approaches include modular designs and integrated systems that optimize energy efficiency, incorporate on-site renewable power, recycle water for cooling, and strengthen resilience against outages and climate-related risks—all while minimizing impacts on neighboring communities.
Residents often push back against data center developments, citing concerns about noise, heat production, and limited local payoff. To them, a giant, windowless “black box” seems more disruptive than beneficial. These realities force developers to choose between continuing to build the old way and meeting escalating resistance, or redesigning facilities to reflect sustainable priorities and deliver shared value. This route can strengthen community support and long-term efficiency, but the tradeoff may involve higher costs, extended construction timelines, and more complex planning. These challenges are especially evident in northern Virginia, where a dense concentration of data centers has earned the nickname “Data Center Alley.” New policies aim to better align economic growth with infrastructure capacity, and developers are being encouraged to adopt cleaner materials, implement efficient cooling systems, and integrate renewable energy while new policies aim to better align economic growth with infrastructure capacity. Stricter zoning, grid modernization, and community engagement are becoming increasingly important to ensure that data centers evolve from controversial neighbors into responsible, long-term assets for the region.
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Rethinking the model
The next generation of data centers is flipping the script, shifting from relentless energy consumers to net-positive contributors. Solar panels, wind turbines, and fuel cells enable facilities to generate clean energy, with excess flowing back to the local grid. Waste heat is repurposed to warm neighborhoods, greenhouses, and nearby buildings, while water and other resources are reused within circular systems. By integrating these strategies into building design, data centers can become community partners, showing that digital infrastructure can strengthen urban and suburban ecosystems rather than weaken them. At the same time, the rapid acceleration of global data production is transforming the industry. Meeting this demand requires careful site selection, advanced computational planning, and operational efficiency, highlighting that the next generation of data centers must innovate both environmentally and strategically to thrive in an increasingly digital world.
The rapid acceleration of global data production is transforming the industry. Meeting this demand requires careful site selection, advanced computational planning, and operational efficiency. The next generation of data centers must innovate both environmentally and strategically to thrive in an increasingly digital world.
Designers are using the latest computational tools to assess energy access, cooling potential, and infrastructure connectivity. Computer-based site selection and advanced modeling allow teams to evaluate proximity to renewable energy sources, cooling potential, resilient infrastructure, and skilled workers, ensuring that sites are efficient and sustainable. This approach can transform data centers from isolated, resource-intensive facilities into strategically located, resilient hubs that support both the digital economy and local ecosystems.
Once a site is selected, regenerative design strategies—including on-site power generation, microgrids, and advanced cooling systems—help reduce environmental impacts and improve operational resiliency. Developers should engage with local communities early in the planning process, sharing their vision, hosting forums, and incorporating public amenities such as parks, green roofs, urban agriculture, and other benefits into the project.
Building a responsible digital future
To earn trust and demonstrate value, data centers must shed their “black box” reputation and actively engage with the environments they occupy, integrating resources that benefit surrounding communities. Future facilities offer seemingly endless opportunities, from hosting rooftop farms and public green space to providing renewable-powered amenities for neighbors, making data centers more visually appealing and better integrated into their surroundings.
Data centers will continue to evolve as new technologies are developed and implemented. For example, to reduce energy losses, some facilities are transitioning from alternating current to direct current, improving efficiency and easing the strain on local electricity grids. Additionally, small modular nuclear reactors (SMRs) offer the promise of independent, low-carbon power to support microgrids and provide reliable energy for high-demand operations, even in regions where grid capacity is limited. These shifts will allow data centers to operate as stable, low-carbon anchors in the energy landscape.
Turning this vision into reality requires decisive leadership. Data centers need innovators, regulators, and communities that are willing to guide them from utility-draining operations to meaningful contributors to sustainability. With intentional action, these facilities can both support our digital world and safeguard the environment. The question is no longer if change is possible, but whether we can work together to make it happen.
