AI data centers can cut water use, tech giants say

Technology companies say new cooling systems can reduce the direct water use of AI data centers, as the facilities face growing public anger in the United States over their demand for water and electricity.

Nvidia said in a June report that its DSX system for designing and managing AI data centers can almost eliminate water consumption at some facilities. The system uses closed-loop cooling, in which liquid flows through servers near the chips instead of being lost through evaporation.

Rystad Energy estimates that data centers consumed 222 billion litres of water worldwide for cooling in 2025. Without adaptive measures, that figure could nearly triple to 644 billion litres by 2030, the consultancy said.

Independent researcher Andy Masley said there is a trade-off between water and energy use in cooling systems, because cutting water use usually requires more electricity. Nvidia says its system reduces some of that problem by allowing warmer liquid to enter servers, meaning fans can often cool the system without year-round cooled air.

Microsoft, Amazon Web Services and Meta also said they use closed-loop systems. Microsoft and AWS used more water overall between 2022 and 2025, but their water-use efficiency improved by 25 percent at Microsoft and 37 percent at AWS, according to their most recent sustainability reports.

There is no industry-wide consistency in how companies report environmental, social and governance figures. SpaceX, which became a major data-center player after acquiring xAI, has not published an ESG report, and ratings agency MSCI gave it its lowest ESG score in June.

Shaolei Ren, an engineering professor at the University of California, Riverside, said companies have less cost incentive to save water because water is generally cheaper than electricity. He said the incentives are linked more to public relations during the backlash against data centers.

Direct cooling is also only part of the water impact. Water is used to generate electricity for data centers and to manufacture chips and servers. In the United States, that hidden water use can be twice the amount a data center consumes directly.