The Legal Impacts of AI Data Centers on Great Lakes Water Law
- WULR Team
- Dec 21, 2025
- 4 min read
How might the implementation of AI Data Centers impact Wisconsin environmental law?
Published December 21st, 2025
Written by Erin Kemper
In October 2025, Ozaukee Press reported that OpenAI and Oracle, alongside developer Vantage Data Centres, plan to construct a massive “Stargate” data campus in Port Washington, Wisconsin. The investment represents a $15 billion investment and nearly one gigawatt of artificial intelligence infrastructure. The publication noted that Wisconsin’s access to reliable freshwater supplies from Lake Michigan was a key factor in the site’s selection, underscoring the Great Lakes’ growing importance as a resource hub for data infrastructure. This project is emblematic of a broader regional trend—hyperscale data centers are rapidly proliferating across the Great Lakes basin, drawn by the region’s stable climate and abundant water.
As the Environmental and Energy Study Institute explains, water is indispensable for modern computing infrastructure because it is one of the most efficient and cost-effective mediums for cooling servers. AI-focused facilities require far denser computational processing than traditional cloud data centers, generating significantly higher levels of waste heat. The EESI estimates that a medium-sized data center may consume as much as 110 million gallons of water per year, while larger “hyperscale” centers can draw up to 5 million gallons per day. These figures highlight the emerging intersection of digital technology and natural resource law, a collision that places unprecedented pressure on existing Great Lakes water protection frameworks.
According to the Alliance for the Great Lakes’ 2025 Water Use Report, data centers across the region are projected to withdraw approximately 150.4 billion gallons of water between 2025 and 2030, roughly equivalent to the annual consumption of 4.6 million U.S. households. The report notes that each large facility may use between one and five million gallons per day for evaporative cooling. This scale of use challenges the regulatory capacity of the region’s cornerstone legal instrument—the Great Lakes-St. Lawrence River Basin Water Resources Compact.
The Compact, enacted in 2008, was designed to protect against large-scale diversions of Great Lakes water outside the basin, requiring states to manage withdrawals and ensure conservation. As the Alliance report emphasizes, the Compact was developed before the advent of water-intensive digital infrastructure. Its provisions primarily target inter-basin transfers, not the vast, continuous intrabasin consumption driven by AI computing. The emergence of high-density data centers, therefore, exposes a structural legal gap in how consumptive use is defined and monitored.
The Alliance’s findings underscore a second vulnerability—the fragmented regulation of groundwater withdrawals. Approximately 20-40% of the Great Lakes’ hydrological input originates from groundwater, and as many as 75% of residents in surrounding states depend on it for drinking water. Yet, many states’ laws still rely on outdated riparian or reasonable-use doctrines, lacking comprehensive registration systems, mandatory reporting or enforceable thresholds for large-scale industrial users. The report warns that most states “may not yet have the tools to curb or halt groundwater use when aquifers begin to decline but before a crisis occurs.”
Moreover, legal oversight of consumptive use, the portion of withdrawn water not returned to the basin, remains underdeveloped. The Compact mandates that withdrawals meet standards ensuring “no significant adverse individual or cumulative impact,” and that they be “reasonable and efficient.” As the Alliance points out, many data center operators rely on nondisclosure agreements and proprietary technology claims to obscure precise water-use data. Advanced cooling methods, such as closed-loop or immersion systems, may further complicate regulators’ ability to assess efficiency. These realities raise pressing legal questions about how state agencies can enforce the Compact’s “reasonable use” standard in a context of rapid industrial and technological innovation.
Recent developments in Wisconsin illustrate these legal tensions. WMTV 15 News reported on November 2025 that state lawmakers held hearings after announcing several multi-billion-dollar data-center proposals, including the Port Washington project. Developers touted Wisconsin’s water abundance as a competitive advantage, while environmental groups and community advocates raised alarms about potential depletion of groundwater and the lack of transparency surrounding water-cooling methods. The Chicago Tribune similarly reported that officials across the Great Lakes region are facing mounting pressure to reconcile economic development with environmental risk, as water withdrawals for AI data centers begin to rival those of traditional heavy industry.
Clean Wisconsin, a leading environmental organization, argued that when indirect consumption of water used for power generation is considered, total usage associated with these facilities could exceed that of nearly one million state residents. The hearings exposed critical gaps in permitting, environmental disclosure and public-interest review. As a result, Wisconsin and other Great Lakes states may soon face legal tests over whether existing environmental impact assessment procedures are sufficient for an industry whose water demand rivals that of municipalities.
The rapid rise of AI data centers poses a profound challenge to Great Lakes water law. The Alliance report urges states to modernize their permitting systems, strengthen registration requirements and expand monitoring of groundwater withdrawals. It also recommends proactive mapping of aquifers and cumulative-use assessments to prevent long-term depletion.
The Compact primarily governs diversions rather than internal consumptive uses. Thus, states may need to enact supplemental legislation to manage cumulative impacts within the basin. Furthermore, the economic development incentives offered to attract data-center investment often conflict with the Compact’s mandate to balance growth with ecological stewardship. Legal reform must reconcile these dual imperatives—sustaining economic opportunity while maintaining the basin’s ecological integrity.
The Great Lakes’ natural abundance, once viewed as an inexhaustible asset, is becoming a strategic resource for global technology infrastructure. The legal frameworks that were designed to protect and rooted in an earlier era of manufacturing and municipal use now face new strains from AI-driven data centers. Regulators and lawmakers must adapt by enhancing transparency, enforcing cumulative-impact analyses and integrating water-energy nexus considerations into permitting decisions. Without such modernization, the region risks undermining decades of legal and environmental progress. As AI transforms economies, the Great Lakes must not become collateral damage in the race for computational power.
