Oracle and OpenAI Construct Large Data Center Amid New Mexico Drought Concerns
Oracle and OpenAI are developing Project Jupiter, a 1,400-acre data center in Doña Ana County, New Mexico, an area experiencing record drought and tree mortality. The state recorded its second-warmest year on record in 2025, with vast forest areas dying due to dwindling water supplies. The project initially drew scrutiny over its potential water demands, prompting Oracle to outline plans for using 11 million gallons of non-potable water annually in closed-loop systems, switching from natural-gas turbines to fuel cells. The New Mexico State Engineer indicates the project utilizes existing water rights.
Oracle and OpenAI are building Project Jupiter, an extensive data center spanning 1,400 acres in Doña Ana County, New Mexico. The facility, located in the Chihuahuan Desert, two miles from the Mexican border, is projected to generate 2.5 gigawatts of electricity and aims for $165 billion in investment capital.
The construction takes place as New Mexico faces severe environmental challenges. In 2025, the state experienced its second-warmest year on record, leading to the mapping of 209,000 acres of trees killed by insects, a more than 200% increase from the previous year. This tree mortality is primarily attributed to dwindling water supplies, with drought conditions escalating significantly throughout 2025. By December 2025, 71% of the state was in moderate drought, and 52% was in severe drought.
Data centers require substantial water volumes for cooling server farms. Project Jupiter's developers acquired existing water rights from a sod farm, totaling 2,400 acre-feet per year. Following earlier reports on the project's potential water needs, Oracle announced a shift to fuel cell technology, stating the data center and fuel cell system would use approximately 11 million gallons of non-potable water annually in closed-loop, recycled systems. Mahesh Thiagarajan, Executive Vice President of Oracle Cloud Infrastructure, emphasized the company's commitment to innovation and environmental outcomes through this updated energy solution.
Oracle has a stated goal to halve water use in water-stressed regions by 2035 and claims a 53% reduction in potable water use at its owned facilities since 2015. OpenAI has not published sustainability reports or total water consumption figures.
New Mexico State Engineer Elizabeth Anderson indicated that Project Jupiter is utilizing existing water rights and will not deplete water resources from agricultural communities. However, the state's 50-Year Water Action Plan projects a 25% reduction in available water in rivers and aquifers within the next 50 years, facing a potential shortage of 750,000 acre-feet without sustained action.
According to Fortune, neither Oracle nor OpenAI responded to requests for comment regarding sustainability reports or water consumption figures.
