The Unseen Thirst of AI: A 129% Surge in Water Demand Looms

WASHINGTON – January 14, 2026 – The artificial intelligence revolution, promising to reshape our world, carries a hidden environmental cost measured in trillions of liters of water. New research projects that the global expansion of AI will drive a staggering 129% increase in water demand across its value chain by 2050, a challenge that pits technological progress against one of the planet's most essential resources.

A comprehensive report by water solutions company Xylem and Global Water Intelligence (GWI), titled Watering the New Economy, provides the most detailed assessment to date of AI's burgeoning water footprint. It forecasts that by mid-century, the industry's annual water consumption will swell by 30 trillion liters—an amount that could strain water supplies in communities around the globe if left unmanaged.

Anatomy of an Unquenchable Thirst

The report deconstructs this massive demand, attributing it to three core components of the AI ecosystem. The largest driver, accounting for approximately 54% of the projected increase, is the energy required to power the computational engines of AI. The generation of electricity, particularly through thermal power plants, is a highly water-intensive process.

Following closely is the fabrication of semiconductors, the intricate silicon brains that enable AI. This sector is projected to contribute about 42% of the new water demand. Manufacturing advanced microchips is a water-heavy endeavor, requiring vast quantities of ultra-pure water to clean and prepare silicon wafers. For context, a single major semiconductor firm like TSMC reported consuming over 100 million cubic meters of water in 2023, with industry-wide usage expected to double by 2035.

Finally, the physical data centers that house and cool the servers running AI models account for the remaining 4% of the direct demand increase. While a smaller percentage, the absolute volume is significant. A single large data center can consume millions of gallons of water daily for cooling, a demand comparable to that of a small city. This is evidenced by tech giants like Google, which reported a 17% increase in its water consumption in 2023, largely attributed to cooling its AI-driven infrastructure.

A Crisis Concentrated in Water Hotspots

The global figures mask a more urgent, localized problem. The report highlights that nearly 40% of existing data centers are already situated in regions experiencing high or extremely high water stress. Future growth is expected to follow a similar pattern, concentrating in already constrained watersheds across the United States, East Asia, and South Asia.

This geographic concentration creates flashpoints where the needs of a multi-trillion-dollar industry could clash with the fundamental needs of local populations and agriculture. In arid regions like Arizona, which has become a major data center hub, communities are raising alarms. The Phoenix area alone hosts dozens of data centers, with estimates suggesting their collective cooling needs could draw more than 170 million gallons of drinking water per day. This raises profound ethical questions about resource allocation in a desert environment grappling with long-term drought.

Independent analysis from S&P Global reinforces this risk, projecting that about 45% of data centers globally will face high water stress exposure by the 2050s. The paradox is that the low humidity of arid climates makes them efficient for certain types of cooling, which has attracted the industry, but it simultaneously increases the marginal cost of every gallon of water consumed.

A Race for Water Positivity

In response to growing scrutiny and environmental risk, the tech industry's biggest players have launched ambitious water stewardship initiatives. Microsoft, Google, and Amazon have all pledged to become "water positive" by 2030, a commitment to replenish more freshwater than their operations consume.

These companies are investing in a portfolio of strategies. Google is funding 112 water conservation projects globally, from stream restoration to rainwater harvesting, which it estimates replenished 4.5 billion gallons in 2024. Amazon is expanding its use of recycled water for cooling at over 120 data centers in the U.S., a move expected to save over half a billion gallons of freshwater annually.

Microsoft is taking a design-focused approach, developing new data centers that support AI workloads with "zero water for cooling" by shifting to advanced chip-level liquid cooling that doesn't rely on evaporation. The company is also actively advocating for policy changes to make reclaimed water the default source for industrial cooling. However, the sheer growth of AI presents a formidable headwind. Despite its conservation efforts, Google’s water use continues to climb, demonstrating the difficulty of decoupling growth from resource consumption.

A Blueprint for a Water-Secure AI Economy

Crucially, the Xylem and GWI report argues that this looming water crisis is not inevitable. It presents a roadmap for a "water transition" that could allow the AI economy to flourish without draining communities dry. The key lies in harnessing existing technologies and fostering collaboration.

The report points out that the 30 trillion liters of projected new demand is dwarfed by the volumes of water currently being mismanaged. Globally, an estimated 100 trillion liters are lost each year to leaks in aging infrastructure, and another 320 trillion liters of wastewater are processed. Capturing even a fraction of this lost or used water could more than offset AI's future growth.

“Advanced treatment technologies, for example, allow us to recycle water rather than waste it. Digital systems can help better manage supply in real time, reducing water lost to leaks,” said Matthew Pine, Xylem’s president and CEO. “It's time for a water transition built on targeted investment and collaboration between industry, utilities, and governments to ensure water systems can support both growth and community resilience.”

This approach is already proving effective in practice. A collaborative project in Mexico saw utilities in Mexico City and Monterrey partner with Amazon and Xylem to install smart pipeline technology. The system of sensors and advanced analytics is projected to save more than 1.3 billion liters of water annually by quickly identifying and mitigating leaks, directly improving water security for residents while supporting industrial needs. This model of cross-sector partnership—uniting utilities, technology providers, and major water users—is presented as the essential blueprint for navigating the challenges ahead, ensuring that water remains a resilient foundation for growth rather than a constraint on innovation.