Forty Global Mayors Unite to Set Standards for AI Data Center Development

Forty mayors representing cities on four continents have entered into a landmark agreement that details the criteria under which they will permit AI data centers to operate within their jurisdictions.

This collaborative effort comes amid growing concerns that data center construction is straining municipal power grids, depleting local water resources, and displacing affordable housing.

The pact, unveiled on Tuesday during London Climate Action Week by C40 Cities—an alliance of nearly 100 cities working to tackle climate change—establishes shared requirements for clean energy usage, site selection, water conservation, and community benefits. It represents the first coordinated global attempt by city governments to shape data center expansion before it overwhelms local infrastructure.

Currently, roughly 1,700 data centers of C40 member cities are operating, with projections indicating a growth of over 40 % in fifty of those cities.

From Phoenix to Melbourne

The agreement evolved from a dialogue between the mayors of Phoenix and Melbourne, who discovered that their challenges were strikingly similar: data centers consuming vast amounts of electricity and water, and competing with housing developers for scarce land.

“We realized the obstacles facing cities worldwide were remarkably alike,” said Cassie Sutherland, Managing Director at C40. “Our strategy was to harness a unified mayoral voice to set clear conditions for accepting data centers.”

In Phoenix, one of North America’s top ten data center markets, pending permits in the metropolitan area alone would effectively double the city’s electricity demand if they were all approved. Mayor Kate Gallego warned that the current wave of investment is exacerbating climate change and harming local communities.

“We recognize the importance of this innovation and the jobs it creates,” Gallego said. “Our priority is to ensure that development proceeds responsibly for both residents and the planet.”

In Melbourne, the stakes are even higher. If all current plans proceed, data centers could consume up to 20 billion litres of water annually—approximately 4 % of the city’s drinking supply, according to Lord Mayor Nicholas Reece. The water system is already under pressure from population growth, extended dry spells, and rising temperatures.

What the Pact Demands

The standards are precise. Data centers should be constructed on abandoned or underused land, run on renewable energy and battery storage, and be required to reduce water consumption, lower emissions, and capture waste heat. They must also create local jobs, source goods and services locally, fund infrastructure upgrades, and engage meaningfully with community stakeholders.

Mayors alone have limited influence. Sutherland emphasized that the vision must be translated into local regulations and guidelines, with support from utilities, other government tiers, and the private sector.

Half of the signatories are U.S. cities—including Seattle, Chicago, Miami, Phoenix and Palo Alto—while European cities from Greece, Spain, Italy, Germany, the U.K. and Norway, as well as capitals in Canada, Kenya, South Africa, Sierra Leone, Côte d’Ivoire, India, Australia and Lebanon, also joined the pact.

Southeast Asia’s Conspicuous Absence

Despite accounting for a quarter of global energy demand growth, no Southeast Asian city signed the agreement. More than 2,000 data centers are already operating across Indonesia, Malaysia, Singapore, Thailand, Vietnam and the Philippines, according to the think tank Ember. The International Energy Agency projects that annual energy demand from those facilities will more than double within five years.

Malaysia has attracted significant investment from Microsoft, Google and Nvidia, yet several Southeast Asian cities were unable to commit due to national policies or other complications, C40 noted. Negotiations continue.

Data centers gravitate to cities because AI-powered systems require near-instantaneous response times, making proximity to clients essential. They tend to cluster, creating metropolitan ecosystems where the business case outweighs land costs—an emergence that has begun to push developments into rural areas, according to Andrew Batson, Global Head of Data Center Research at JLL.

The pact’s signatories believe that a unified front will alter the calculus. “Without a coordinated approach, developers will simply seek out cities weak enough to accept unfavorable conditions,” Gallego added.

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