Google on Tuesday said it would halt plans to develop a major $200 million data center in Chile to address environmental concerns, a decision reflecting growing worries about the impact of power-thirsty projects around the world.

The U.S. technology company first obtained permits in 2020 to construct the vast project in Chile's capital, Santiago, as demand for the server farms skyrocketed across the globe, fueled by a surge in cloud-based technologies and a craze for generative AI.

But months after a Chilean court partially reversed the center's authorization over water usage concerns, Google announced Tuesday that it would revise the project to comply with more stringent environmental requirements and change its water-intensive cooling system.

"A new process will start from scratch," Google said in its statement. "Sustainability is at the heart of everything we do, and the way we design and manage our data centers is no exception."

Community complaints in the drought-stricken South American nation over the air-conditioned computer farm's energy and water usage sharpened government scrutiny and prompted a local court to temporarily revoke the project's authorization in February.

The Santiago environmental court asked Google to respond to concerns that the data center could affect Santiago's main aquifer.

The court said it was highly possible that cooling the heavy equipment—which creates the online storage for the data of millions—could pull from Chile's water resources. The country is experiencing a crippling drought supercharged by climate change, a source of outrage among locals and Indigenous groups.

Google didn't provide an updated timeline for the project and said that it would keep the location the same. It said developers had already notified Chile's environmental regulator of the company's decision to pause its permit application process and rethink its strategy.

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