The Water Challenge Facing Digital Giants
As data centers expand across the United States, there’s growing concern about their hefty consumption of water and electricity. These centers, which house the servers that run the internet and enable artificial intelligence (AI), are under increased scrutiny from the public regarding their environmental impact.
Data centers rely on water to cool their servers, as these machines generate significant amounts of heat. According to Rystad Energy, a consulting firm, global data centers consumed approximately 222 billion liters (or about 59 billion gallons) of water for cooling in 2025. If no action is taken to curb this usage, the figure is projected to rise nearly threefold, reaching 644 billion liters by 2030. The firm believes that implementing efficiency measures could help contain this increase to below 100%.
Nvidia, a prominent chipmaker, has introduced a solution aimed at addressing the water issue. In a report released in June, the company highlighted its new system called DSX, which is designed to manage AI data centers more efficiently. Nvidia claims that this system could nearly eliminate water consumption at some facilities. Their approach uses a closed-loop cooling method that circulates liquid directly through and near the chips, which can get extremely hot, exceeding 80°C (176°F).
However, this focus on reducing water usage may lead to increased energy consumption. Andy Masley, an independent researcher on AI and data centers, notes that there’s often a direct trade-off: less water can mean more electricity is needed to keep temperatures down. Nvidia addresses this challenge by allowing the circulating liquid to enter servers at a warmer temperature of 45°C, compared to the typical 32°C used by other systems. This strategy helps minimize the need for constant cooled air, with simple fans often sufficient for maintaining temperature.
Rising Public Concern
Major tech companies like Microsoft, Amazon Web Services (AWS), and Meta also report utilizing closed-loop cooling systems that they claim result in no net water loss. While these companies have increased their water use due to expanding operations between 2022 and 2025, their efficiency in water consumption has improved significantly—Microsoft by 25% and AWS by 37%.
However, comparing these efforts is challenging due to the lack of a standard framework for reporting on environmental and social responsibility metrics. For instance, SpaceX, which has stepped into the data center arena after acquiring the AI company xAI, has not released any environmental, social, and governance (ESG) report, earning a low score from rating agency MSCI.
Experts note that because water is generally cheaper than electricity, companies may not feel immediate financial pressure to reduce water usage. Shaolei Ren, an engineering professor, explains that the motivation for companies to change often stems from public relations efforts, especially as more communities express opposition to data centers due to their environmental impact.
Upgrading older data centers to adopt these newer, water-saving technologies can be expensive. Nevertheless, these older facilities are usually smaller and less energy-intensive than the massive new data centers being constructed, requiring less water to cool.
It’s important to remember that the water impact of data centers extends beyond their direct consumption for cooling. Additionally, water is needed to generate the electricity that powers these centers and to manufacture the chips and servers themselves. In the U.S., this indirect water usage can be twice as high as the direct consumption by data centers.
In conclusion, as the digital landscape continues to grow, the demand for water at data centers is becoming a crucial issue. Tech giants are being called to find a balance between technological advancement and environmental responsibility, ensuring that the future of data management is sustainable.
