Civil rights groups are increasingly concerned that AI's rapidly spreading physical infrastructure is deepening climate burdens for communities of color.

Why it matters: Massive data centers require vast quantities of water, energy and land.

• Many of these centers are clustered in regions where marginalized communities already face higher levels of air pollution, industrial zoning and climate vulnerability.

Threat level: Civil rights groups say these impacts resemble earlier patterns seen with highways, refineries and manufacturing: pollution concentrated where political resistance is weakest and property values are lowest.

• Data centers can also consume millions of gallons of water per day and use as much electricity as a small city, driving up energy and water use costs for poor residents.

Zoom in: A supercomputer data center built by Elon Musk's xAI in southwest Memphis, a historically Black neighborhood, faces a legal challenge from the NAACP. The group says the site's gas generators are violating the Clean Air Act.

• Nitrogen dioxide pollution near the site has spiked as much as 79%, according to Time, raising the risk of asthma and respiratory illness in a community already burdened by high pollution rates.
• Earlier this year, Brent Mayo of xAI said the data center was adding newer units that would make it "the lowest-emitting facility in the country."

In Amarillo, Texas, advocates are fighting what developers call the world's largest AI data center, warning it could drain the Ogallala Aquifer, a shrinking water lifeline for the Texas Panhandle and southern Great Plains.

• Latino residents and rural water advocates fear losing access to groundwater already stretched thin by agriculture and drought.
• The city's former mayor, working as a community lead on the data center project, says it will use closed-loop cooling that should minimize water usage.

Northern Virginia — site of the world's largest data center hub — is seeing mounting resistance in Loudoun and Prince William counties, where Black families say the build-out is overwhelming their communities.

Near Tucson, Ariz., a majority-Latino city strained by megadrought, a proposed "Project Blue" data center could consume millions of gallons of water per year.

What they're saying: "Data centers by design do not have a lot of jobs. It's predatory. They target cities desperate for economic development," LaTricea Adams, CEO of the Memphis-based Young, Gifted & Green, tells Axios.

• "This is the Wild West. There's not even case law yet. What happens now will dictate the future of how data centers are regulated."

Friction point: As AI data centers expand across the West, Indigenous nations say the industry is accelerating resource extraction without tribal consent.

What's next: The NAACP announced it's bringing together advocates, researchers and regional leaders for a two-day strategy summit in Washington this week to discuss AI data centers.

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The House may soon provide an indication as to whether an overhaul of permitting — a legislative Holy Grail for many business groups — will be possible in this Congress.

Why it matters: Streamlining how the government green-lights energy and other projects is one of the few areas of widespread agreement on Capitol Hill, though a compromise has remained elusive.

Driving the news: The House is expected next week to consider a permitting bill, the SPEED Act, co-sponsored by Natural Resources Chairman Bruce Westerman and Rep. Jared Golden (D-Maine).

• It is aimed at overhauling environmental reviews in what proponents say would be a way to unlock fossil fuels and renewable energy alike.
• The bill includes a provision aimed at protecting already-approved permits in response to Trump 2.0 efforts to overturn those projects, particularly offshore wind.

Friction point: The House Freedom Caucus is deeply skeptical of any changes that could benefit wind and solar.

Zoom in: The House is expected this week to take up a separate bill that would limit states' authority under the Clean Water Act to block infrastructure projects.

• The Transportation and Infrastructure Committee advanced it in June on a party-line vote.
• Republicans say it would provide clearer instruction and standards for permitting agencies. Environmental groups counter it would make it easier for polluters to contaminate rivers and other drinking water sources.
• A second bill expected to come up this week would empower the Federal Energy Regulatory Commission to speed pipeline reviews.

What we're watching: The Senate, whose Environment and Public Works Committee members have been working on a separate bipartisan package to overhaul the National Environmental Policy Act (NEPA).

📫 Pressure on Trump's trade team: Manufacturers want Commerce Secretary Howard Lutnick and trade rep Jamieson Greer to seek full exemption for U.S. companies from a major EU sustainability rule.

• Why it matters: A new letter from the powerful National Association of Manufacturers shows K Street angst over the reach of the Corporate Sustainability Due Diligence Directive — and potential legal exposure.
• State of play: The group argues that EU plans to soften the rule aren't enough, and floats options for the U.S. team's posture. Even short of a full exemption, EU officials could limit its reach to corporate activities within its borders, the letter states.

🖥️ States press FERC for data center summit: State utility regulators are asking FERC to convene a conference next month to hash out its plans to take control of large data centers' interconnection to power grids.

• Why it matters: The ask, from the National Association of Regulatory Utility Commissioners, shows how states fear getting rolled in the DOE-backed FERC rulemaking, which is touching off an intense turf fight.
• What we're watching: "This technical conference should include state regulators and commenters who have suggested alternative paths, including a consensus-based approach that incorporates the concept of cooperative federalism," NARUC's comments state.

🚘 Via Bloomberg, "Six European Union leaders including Italy's Giorgia Meloni asked the European Commission to propose softening the bloc's vehicle emission rules to halt a de-facto ban on combustion engines planned by the middle of the next decade."

• Why it matters: Aggressive climate targets are coming under pressure in Europe and beyond.

Battery startup ZincFive has closed a $30 million Series F round to meet a backlog of orders and develop more AI data center products, Axios Pro Deals was first to report.

Why it matters: Data center developers are interested in specialized backup batteries as a way to manage spiky AI training loads and lower costs.

How it works: ZincFive makes a nickel-zinc battery that can charge and discharge more quickly and is less flammable than lithium-ion batteries.

• The nickel-zinc battery can provide backup power for a data center at a lower cost than lithium-ion batteries if used in short bursts of seconds and even milliseconds.
• For a longer duration, like hours, nickel-zinc batteries are more expensive than lithium-ion.

Zoom in: The funding round included Helios Climate Ventures, Climate Investment, Japan Energy Fund, General Ventures, and Clear Creek Investments.

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What we're watching: How higher prices affect the permitting legislation, pipeline fights and even the midterm elections. Go deeper.