The AI Boom Is Creating New Questions for Responsible Investors

 

This piece originally ran in our column, Cantor's Corner, in the Santa Fe New Mexican. If you would like to read it in its original format, please click here.

By: Leah Cantor, MS

Artificial intelligence has become the defining technology of our time. It’s currently one of the leading sources of GDP growth,¹ and continues to drive the stock market to new highs as investors bet on expectations that it will transform nearly every sector of the economy.

Yet while investors focus on revenue growth potential or fret over comparisons to the dot-com bubble, a different conversation is unfolding in communities where the buildout of AI infrastructure is affecting land use, energy demand, and water consumption. Policymakers, meanwhile, are grappling with the broader philosophical, economic and national security implications of a technology that promises to change life as we know it.

For responsible investors, the key question isn't simply whether AI companies will continue to deliver strong returns. It's whether the industry's rapid growth can be sustained in ways that protect the interests of humanity and the planet.

Three issues deserve particular attention: How does AI infrastructure affect local communities and labor markets? Can AI grow without undermining climate goals? And how is AI being governed with respect to safety, privacy, and human rights?

To look at some specific examples, let's dig into the issue of AI infrastructure. 

The impacts of data centers are at the heart of rising political backlash against AI. Power generation is one source of conflict. AI's rapid expansion comes with enormous energy demands. Across the country, electricity rates near data centers have risen sharply, prompting calls for major AI companies to supply their own power.²  Depending on whether fossil fuels or renewables generate this electricity, AI's growth could make it more difficult for companies and nations to meet their carbon reduction targets.

AI also requires large amounts of water for cooling and for the process of generating the electricity that the data centers use. In Phoenix, for example, data centers could account for as much as 20% of the city's annual water use by 2031.³

Communities also worry about the light, noise, and air pollution produced by data centers.⁴

Beyond environmental impacts, concerns are rising about AI's potential to disrupt labor markets, obliterate individual privacy, and jeopardize national security.

The pentagon recently made agreements with SpaceX, OpenAI, Google, Nvidia, Reflection, Microsoft, Oracle and Amazon Web Services allowing AI to be deployed for "any lawful use," including military applications. Anthropic was the only tech giant to refuse the agreement due to concerns that their technology could be used for domestic mass surveillance and autonomous lethal weapons.⁵

Responsible investors should question both the ethical and financial risks of AI. To better understand what responsible AI infrastructure looks like in practice, I recently toured a large data center outside Washington, D.C. Our excursion was hosted by USSIF (the US Sustainable Investment Forum), a national membership organization that lobbies for sustainable, responsible, and impact investing. What I found reinforced some concerns, but also challenged my assumptions.

Instead of the dark, overheated, and deafening warehouse I expected, we were guided through a bright, relatively quiet facility whose employees seemed proud of their work. Managers were eager to point out that the buildings were BREEAM certified, meaning they met exacting environmental standards. They also asserted that the center did not strain local water supplies or electricity rates and even hosted a local beekeeper’s hives as well as a turtle pond. Apparently, not all data centers are created equal.

Seeing one facility doing things well highlighted that these practices are not yet universal. A lot depends on legislators, communities, and investors, who all play a crucial role in holding companies accountable and asking the right questions.

This is especially true here in New Mexico, where several large data centers have been proposed, including a 1,400-acre data center that is under construction in Doña Ana County. Not surprisingly, water impacts are a top concern in our drought stricken state where the Rio Grande has already run dry this year.

Developers of the facility claim that purchasing existing agricultural water rights means the project will not reduce local water availability.⁶ But what happens if future water shortages make those rights impossible to honor? The Colorado River is already under increasing strain from climate change, and negotiations over future water allocations remain unresolved due to disputes about which states should be subject to cuts that will be needed to preserve a dwindling supply.⁷ Investors and lawmakers should be asking whether today's assumptions about water availability will hold tomorrow.

As this example illustrates, social and environmental issues are also investment issues that could impact the financial viability of projects in years to come. Beyond the risks posed by water shortages, energy costs, and climate change, companies must also consider the possibility that community opposition could delay projects or lead to new regulations.

Investors need to look beyond mere earnings projections and ask tougher questions. How will AI affect a company's energy use, greenhouse gas emissions, and climate commitments? Where does it source electricity and water, do those projections take future climate scenarios into account, and how might those choices affect local communities? Does the company disclose how it uses data to train AI models and what safeguards it has in place to protect privacy and safety? Is there meaningful board oversight of AI ethics and risk? Does the company engage transparently with policymakers, investors, and the public? The answers won't simply reveal whether a company is acting responsibly—they may also provide insight into how well it is positioned to navigate the regulatory, environmental, and social challenges that will shape AI's future.

 

The views expressed in this article are the author’s opinions and are provided for informational and educational purposes only. This material is not intended as investment, legal, or tax advice, and should not be relied upon as a recommendation to buy or sell any security or investment strategy. References to economic trends, energy markets, or future developments are based on current opinions and assumptions that are subject to change. Past trends and historical developments are not guarantees of future results.

 

Sources:

[1] https://www.stlouisfed.org/on-the-economy/2026/jan/tracking-ai-contribution-gdp-growth

[2] https://www.bloomberg.com/graphics/2025-ai-data-centers-electricity-prices/

[3] https://www.wsj.com/tech/ai/ai-data-centers-water-use-901e2902 

[4] https://www.theguardian.com/technology/2026/jul/06/ai-climate-crisis

[5] https://www.theguardian.com/us-news/2026/may/01/pentagon-us-military-pairs-with-spacex-google-openai  

[6] https://www.npr.org/2026/06/12/nx-s1-5786551/worries-over-water-as-a-giant-data-center-moves-into-the-new-mexico-desert

[7] https://coloradosun.com/2025/10/30/colorado-river-negotiations-experts-sticking-points/

https://iee.psu.edu/news/blog/colorado-river-crisis-water-shortages-climate-change-and-sustainable-management