California's Largest AI Data Center Sues for 287 Million Gallons of Colorado River Water

California's Largest AI Data Center Sues for 287 Million Gallons of Colorado River Water

A proposed $10 billion AI data center sparked a Colorado River water rights battle, intensifying the conflict between AI infrastructure and scarce water resources.

LS
Linsey Smith
Jul 27, 2026
1 min read

A developer behind a proposed $10 billion AI data center in California's Imperial Valley has sued for the right to draw 287 million gallons of Colorado River water per year, a flashpoint case that could reshape how the American West allocates its most contested resource.

Imperial Valley Computer Manufacturing filed suit against the Imperial Irrigation District (IID), alleging the district illegally denied its water permit and broke its own obligations under Western water law. The water at stake, roughly 880 acre-feet, or about 0.03% of the Imperial Valley's annual supply, is the equivalent of what a 160-acre farm uses in a year. But local farmers, tribal groups, and environmental advocates say the project would set a dangerous precedent as the Colorado River system runs dry.

CalMatters reports that the City of Imperial has separately filed a lawsuit under the California Environmental Quality Act challenging the data center's environmental review. The case is being watched closely because it is the first major legal test of whether AI infrastructure projects can claim Western water rights, and because more than a dozen similar projects are queued up across Arizona, Nevada, and Utah. The Imperial County Superior Court is expected to rule later this summer.

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