Cities Launch Global Urban Data Centres Pact to Address AI Infrastructure Challenges

The digital economy we all take for granted runs on infrastructure most people never see.

Every message sent, every doctor’s appointment booked, every journey mapped and payment made depends on vast networks of data centers working around the clock. Across the C40 network of nearly 100 global cities alone, there are already more than 1,700 data centers, with many more planned. The rapid development of artificial intelligence (AI) is changing data centers as we’ve historically known them — driving the construction of massive ‘hyperscalers’ that require enormous amounts of electricity and pose new challenges for communities around the world. It’s the biggest thing to hit the energy grid since air conditioning. Left unchecked, this expansion could significantly increase emissions, strain resources, push up residential energy prices and erode public trust.

We know that a single facility can consume as much electricity as tens of thousands of homes. Cooling systems can place a serious strain on water supplies. And in cities and towns already grappling with housing shortages and cost-of-living pressures, these developments compete with communities for space and resources. Meanwhile, promises of long-term local job opportunities rarely materialize, with data centers too often appearing in neighborhoods with little clear return for communities.

Communities of all sizes and demographics, rural and urban, are grappling with this unprecedented infrastructure challenge. And it’s a political one too. Who gets to shape the infrastructure powering the digital age?

More than 8,000 miles separate our two cities, but we, and our fellow mayors around the world, are now working together to mitigate the challenges that this resource-intensive urban infrastructure will pose to our residents.

Left unchecked, this expansion could significantly increase emissions, strain resources, push up residential energy prices and erode public trust.

Today, we’re launching the Global Urban Data Centres Pact. For the first time, cities are coming together to set out what the future should look like for data centers in urban areas.

The principles are straightforward: data centers should not increase energy bills, strain water supplies or undermine climate targets. When planned well, they can support the transition to clean energy, create good local jobs and strengthen urban infrastructure.

The pact calls for data centers to be integrated into city planning, with a focus on brownfield sites and avoiding the displacement of communities. It sets expectations on renewable energy, water use and carbon emissions. It calls for transparency and proper engagement with residents. And it is clear that, where new infrastructure is needed, the costs of these upgrades should be supported by the data center operators.

We cannot afford to let this become a race to the bottom or to allow the fear of missing out on new technology result in data centers being waived through our planning processes. This is about setting expectations and shifting the direction of investment toward sustainability.

In Phoenix, that means putting guardrails in place early. The city has already implemented zoning rules that direct this infrastructure away from residential areas and into industrial areas, and define basic protections, including for fire safety. Growth is continuing, but it is being shaped to reflect the broader needs of the community.

In Melbourne, we are developing guidance that promotes best practice in site planning, design and operation of data centers and other AI infrastructure. Melbourne is engaged with the state and federal governments to strengthen regulations to ensure measurable community and climate benefits.

Across the C40 Cities network, mayors are adapting their policies to align data center demands with climate goals: Stockholm is utilizing waste heat from data centers to warm thousands of homes. Cape Town is opening pathways for facilities to access renewable energy through the grid. Across Europe, planning frameworks are tightening, bringing more discipline to where and how facilities are built.

We cannot afford to let this become a race to the bottom or to allow the fear of missing out on new technology result in data centers being waived through our planning processes.

We are not anti-data center or anti-AI. These technologies will influence all parts of our lives in the years and decades to come. We just believe that they must be developed on terms that work for the cities and residents that host them, not imposed in ways that undermine climate goals or shift costs onto households. With the scale of investment flowing into this sector, and the creativity and entrepreneurial spirit that this industry brings to bear, there is a genuine opportunity to accelerate clean energy rather than lock in new fossil fuel demand.

These are practical, city-led solutions to a global challenge. Investors and tech companies need clarity so they can expand responsibly and invest in our cities. Residents need confidence that their voices will be heard and that they will see the benefits of these developments. Strong city leadership provides both.

The companies building the infrastructure of the AI age now face a choice. They can repeat the mistakes of earlier tech booms by extracting resources, driving up energy demand and leaving communities to absorb the costs, or they can help build a new model where digital growth strengthens cities.

The decisions made in cities around the world over the next few years will shape not only the future of AI, but the future liveability and sustainability of cities themselves. We’re calling on our fellow city leaders and those developing data centers to join us in this mission. Together, we can set a higher standard for decades to come.