Water’s Role in a Warming World: A Call for Innovation
Water, whether in excess or scarcity, significantly impacts how communities respond to climate change. This essential resource constitutes a massive global market worth $1.6 trillion, playing a crucial role in the economic framework worldwide. As climate challenges like droughts and floods intertwine with issues like outdated infrastructure and inefficient resource management, the need for innovative solutions is becoming increasingly urgent.
Recent polls indicate that water concerns are also shaping perceptions about data centers, with many Americans expressing worries over their water consumption. However, Tom Ferguson, founder of Burnt Island Ventures, a firm dedicated to water-focused investments, suggests that these fears might be misplaced.
Ferguson emphasizes that many investors lack the expertise in water issues, leading to misconceptions about its market potential. Effective investment requires collaboration with those who thoroughly understand the water sector. Burnt Island Ventures recently secured $50 million to support budding water innovations and is in the process of raising an additional $75 million for later-stage startups with established technologies.
Ferguson has years of experience in this field, previously leading an accelerator for water startups at the nonprofit Imagine H2O. His investment firm has backed diverse water-related projects, including advanced treatment systems and climate adaptation strategies.
However, Ferguson is cautious about investing in cooling systems for data centers. These facilities typically pull water to cool servers, a practice that can lead to significant water evaporation. Alternative cooling methods, while more efficient, are not yet widely proven and introduce considerable risk.
Ferguson suggests that major tech companies will likely develop their cooling systems in-house to maintain strict control over their operations. Despite this, he’s not entirely negative about the prospects for improving water efficiency in data centers. Many companies are working on technology to better track and manage water usage in these facilities, acknowledging public concerns such as the recent halt of a $3.6 billion data center project in Tucson, Arizona over local water issues.
Ferguson believes that much of the worry surrounding water consumption by data centers is overstated. He points out that these facilities consume significantly less water than golf courses and is confident that the tech industry can manage water use effectively. Major companies like Microsoft, Amazon, and Google are pushing to be “water positive” by 2030, aiming to return more water to the community than they consume.
He acknowledges that public perception can often overshadow actual innovations and improvements in water management. The real question, he suggests, is whether the benefits of artificial intelligence will justify the water it uses.
Christopher Gasson, a market intelligence expert, has noted that data centers are quite efficient in their water usage compared to other industries. They generate more revenue using less freshwater, suggesting a more favorable comparison with the semiconductor or food sectors.
Ferguson is particularly interested in “vertical AI,” which is tailored specifically to address unique problems within the water sector. For instance, one of his firms, SewerAI, uses artificial intelligence to automate sewer inspections, while another, Daupler, helps water utilities manage service requests more effectively.
Ferguson believes that these focused innovations are developing quietly but will become increasingly significant. While there are growing concerns about water use related to AI, he reminds us that the fundamental importance of water to life cannot be overstated.
Ultimately, Ferguson insists on the seriousness of water issues. Unlike discussions about emissions, water problems have a direct and urgent impact on communities. As such, addressing water concerns in relation to climate change is not just important, but necessary for sustainable future growth.
