Mayors from 40 cities around the world have endorsed a new agreement aimed at influencing how urban data centers are built and operated as governments and local communities face growing concerns over electricity demand, water consumption and land use linked to the rapid expansion of artificial intelligence infrastructure.

The Global Urban Data Centres Pact was launched Tuesday during London Climate Action Week by C40 Cities, a network of nearly 100 cities focused on climate issues. According to The Associated Press, metropolitan areas in the group already host about 1,700 data centers, with development projected to increase by more than 40% across 50 member cities.

The initiative emerged after officials in Phoenix and Melbourne raised concerns over the growing demands data centers place on electricity grids, water supplies and available land. City leaders sought to establish common standards to avoid infrastructure growth placing additional strain on communities and local resources.

Roughly half of the signatories are mayors of cities in the United States, including Phoenix, Seattle, Chicago, Miami, Albuquerque, Palo Alto and Riverside. Cities in Europe, Africa, Australia, India and the Middle East also joined the agreement.

The pact calls for data centers to be built on abandoned or underused land and for projects to minimize heat, noise and air pollution. It also urges developers to use renewable energy and battery storage, reduce water consumption and emissions, recover waste heat and finance infrastructure improvements associated with their projects. Participating cities are also seeking stronger community engagement and commitments to local hiring and procurement.

Phoenix has become one of North America's leading data center markets because of its reliable electricity supply and favorable weather conditions. However, pending permit requests in the metropolitan area could double electricity demand if every proposed facility is constructed. Phoenix Mayor Kate Gallego said city leaders support technological investment but want development to align with environmental and community priorities.

Melbourne officials have voiced similar concerns. Lord Mayor Nicholas Reece said planned facilities in the Australian city could consume as much as 20 billion liters of water annually, equal to roughly 4% of Melbourne's drinking water supply.

Data centers are becoming an increasingly important driver of global electricity demand. The International Energy Agency said in its latest electricity outlook that consumption is rising faster than overall energy demand, with artificial intelligence, advanced manufacturing and data centers among the major factors behind the increase. Energy security has become a major issue in several regions following conflicts in the Middle East and continuing disruptions linked to the war in Ukraine, which have highlighted vulnerabilities in power markets and supply chains.

Industry analysts have noted that data centers increasingly cluster near businesses requiring low-latency services for AI applications and cloud computing. Their expansion has sparked opposition in some areas amid concerns about rising electricity costs, pressure on water resources and strain on local grids.