- Indirect water consumption — the water used at power plants supplying electricity to data centers — has historically been about 12 times as great as what data centers use on-site, according to Lawrence Berkeley National Laboratory; only Meta discloses both figures, while Microsoft, Google, and Amazon report only direct use, meaning the true water footprint of the AI infrastructure buildout is dramatically larger than what sustainability reports show.
- Google’s just-released 2025 sustainability report shows direct water consumption rose 34% to 10.9 billion gallons; but a peer-reviewed analysis estimates Google consumes roughly three times as much water indirectly as directly through its power supply — and since much of that power comes from fossil-fuel plants that pay renewable-energy credits rather than actually running on renewables, the water offset those credits imply doesn’t translate to water restoration in any specific drought-stressed region.
- About two-thirds of new US data-center construction is in water-stressed areas such as Phoenix, where data centers currently account for ~3% of the city’s annual water use but could exceed 20% by 2031 according to Ceres — approaching the total water used for all of Phoenix’s lawns and landscaping — with neighboring New Mexico also facing rapidly rising demand as it generates power for Phoenix-area facilities.
- Nvidia has unveiled a closed-loop cooling system that eliminates on-site water use once filled, and Microsoft has committed to deploying zero-water cooling in all new data centers starting in 2027; but most existing facilities use evaporative cooling that is energy-efficient but water-hungry, and retrofitting them would be prohibitively expensive — meaning the structural water problem will persist for years even as next-generation builds improve.
What Happened?
A WSJ investigation finds that the $1 trillion AI infrastructure buildout by Microsoft, Google, Amazon, and others is consuming far more water than the companies publicly report. Their annual sustainability reports tally water used on-site at data centers for cooling — but ignore the much larger volume consumed at the power plants generating their electricity. Lawrence Berkeley National Laboratory found that indirect water use for data centers averages about 12 times direct use. Meta is the only major hyperscaler that discloses both. Google’s direct water use rose 34% in 2025 to 10.9 billion gallons; factoring in indirect use, the actual total is likely several times higher. Many of the biggest new data-center complexes are being built in Phoenix and other water-stressed regions of the American Southwest, either drawing on aging fossil-fuel power plants or building their own dedicated natural-gas plants — both of which consume significant local water.
Why It Matters?
Water is the least-discussed but most locally acute consequence of the AI infrastructure boom. Unlike carbon emissions — which are diffuse and global — water consumption is intensely local. If a river in Nevada runs dry because a data center in Phoenix is drawing from the same watershed, renewable-energy credits from a wind farm in Michigan provide no relief. Ceres estimates Phoenix’s data-center water demand could climb from 3% to over 20% of the city’s annual supply by 2031, at which point it would rival total residential landscaping demand — in a desert city already facing long-term Colorado River depletion. For investors in Nvidia, Microsoft, Google, Amazon, and Meta, undisclosed water risk is a material ESG liability that current sustainability reports don’t capture, and community opposition has already blocked, stalled, or canceled $170 billion of AI data-center capacity since 2024 according to climate consultancy Carbon Direct.
What’s Next?
Nvidia’s closed-loop zero-water cooling is the most promising near-term solution, and Microsoft’s 2027 commitment to deploy it in all new builds sets a standard the industry may need to follow. But the retrofit problem for existing data centers — which use evaporative cooling that is efficient but water-intensive — remains largely unsolved and potentially too expensive to address at scale. State and local governments in water-stressed markets are beginning to impose disclosure requirements and usage caps, and 16 state attorneys general have already challenged the legitimacy of renewable-energy credits as a substitute for actual water and emissions reductions. The next major battleground is likely regulation: whether Congress or the EPA moves to mandate full indirect water disclosure, and whether water-stressed states impose moratoriums on new data-center construction pending infrastructure upgrades.
Source: The Wall Street Journal
