AI data centers are less thirsty now, tech giants say

AI data centers are less thirsty now, tech giants say NEW YORK Tech giants are claiming that their latest advancements in AI data center design have significantly reduced water consumption, addressing growing public concerns over the sector’s environmental impact. Companies such as Meta, Amazon Web Services (AWS), and Microsoft have adopted closed-loop cooling systems, which they assert require no net water loss. Meanwhile, NVIDIA has introduced a new system called DSX, allowing it to nearly eliminate water usage at certain facilities by employing a closed-loop approach where liquid circulates directly through servers, maintaining optimal temperatures without relying heavily on external water sources. According to Rystad Energy, global data centers consumed 222 billion liters of water in 2025 for cooling purposes. Without adaptive measures, this figure could nearly triple by 2030, reaching 644 billion liters. However, steps to curtail this growth could maintain usage below 400 billion liters. NVIDIA’s DSX system operates by allowing liquid to enter servers at a higher temperature, around 45 degrees Celsius, compared to the typical 32-degree Celsius used in many existing closed-loop systems. This reduces the need for continuous air cooling, thereby lowering both water and energy demands. Andy Masley, an independent researcher specializing in AI and data centers, notes that there is a direct trade-off between water and energy use for cooling. Reducing water typically increases energy consumption because the liquid within sealed pipes still requires cooling, often via air circulation, which relies on electricity. At NVIDIA, simple fan-based cooling is frequently sufficient, though mixed methods may be necessary in extreme conditions. Josh Parker, NVIDIA’s head of sustainability, emphasized that these strategies help mitigate the broader environmental impact of data centers. While NVIDIA claims near-complete elimination of water use in some cases, other companies remain cautious. Microsoft, AWS, and Meta have confirmed they also utilize closed-loop systems, but they have not disclosed specific figures on water savings. Their sustainability reports indicate that despite increased overall water use between 2022 and 2025, efficiency has improved, by 25% at Microsoft and 37% at AWS. However, there is no uniformity in how companies report their environmental, social, and governance (ESG) efforts. Elon Musk’s SpaceX, which recently acquired xAI, has yet to publish an ESG report, earning it the lowest rating from MSCI in June. Shaolei Ren, an engineering professor at the University of California, Riverside, explained that companies have less financial incentive to reduce water use since it is generally cheaper than electricity. Public relations considerations, however, play a larger role given the rising backlash against data centers in the U.S. Upgrading older facilities to newer technologies is costly, but older data centers are inherently smaller and less powerful, requiring less cooling. Minh K. Le, leading data center and hydrogen research at Rystad, noted that this factor may lessen the urgency for upgrades. Beyond direct water use, the environmental impact extends to energy generation. Many data centers rely on fossil fuels, contributing to greenhouse gas emissions. A 2024 study revealed that over half of U.S. data centers are powered by fossil fuels, emitting more than 105 million tons of CO2 annually. Efforts to offset these emissions would require over 31,000 wind turbines operating continuously. Additionally, the expansion of data centers has delayed the retirement of coal plants and spurred the construction of new gas-fired facilities, further complicating climate goals.