Sam Altman, chief executive of OpenAI, has called community concerns about AI data centres consuming water “insane”. Scientists who study the question are less certain about almost everything else.
Event Context
“We don’t have the real ground-truth numbers on data-centre water use to put everyone on the same page,” Eric Masanet, a sustainability researcher at the University of California, Santa Barbara, told The Atlantic.
This is the central problem. As AI drives expansion of server infrastructure, freshwater costs are substantial, contested and largely unknown.
Amazon’s disclosure last month that its data centres consumed 2.5 billion gallons (about 9.5 billion litres) of water in 2025 — roughly 5% of Seattle’s annual consumption — was among the most detailed public accounting any major cloud company has produced.
Still, the figure excluded all water consumed by power plants generating its electricity, Bloomberg reported. That omission can be consequential.
Michigan has become one of the most contested grounds in the country.
In Saline Township, a farming community of roughly 2,400 people known for its corn and soybean fields, a proposed $16 billion complex — nicknamed “The Barn”, and backed by Oracle, OpenAI, Related Digital, Blackstone and Walbridge — was initially rejected by the township.
The developers sued, and a legal settlement allowed construction to begin as a $14 million community benefits package covering farmland preservation, fire service improvements and water use restrictions was agreed upon.
Opponents continue to challenge the settlement in court.
In India, where a lack of advanced chip-making capacity makes data centres the primary route into the AI economy, the same conflicts appear to be emerging.
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For this reason, experts have called for standardised, facility-level water-use reporting, mandatory water risk assessments for all new developments, and integration of water availability into siting decisions.
None is currently standard practice.
“We need more transparency. Then communities will actually know what they’re getting into and can evaluate the costs and benefits, because the situation is very different from locality to locality,” Iris Stewart-Frey, a professor of environmental science at Santa Clara University and lead author of a report on California’s data centre water use, told Bloomberg.
Team Analysis
Residents of the Balkum area in Thane, on the outskirts of Mumbai, on July 18, 2026 protested against a proposed 53-acre Amazon facility they say would require at least 12 million litres of water per day, as per PTI report. Amazon has said the project complies with all environmental regulations and would not draw on local supplies.
Kerry Person, Amazon Web Services vice-president, said alarm bells about data centres’ water use are inflated concerns.
Match Outlook
New York governor Kathy Hochul this month signed the US’s first statewide data centre moratorium, citing “massive amounts” of water that hyper-scale facilities could require. A June Reuters/Ipsos poll found that only a third of Americans approve of the current pace of data centre construction, and just 14% said they would support one in their own community.
“If you look at the press right now, the data centre industry is apparently consuming all of the water in the world… When you actually look at the data and look at the details, nothing could be further from the truth,” Person said.
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The International Energy Agency (IEA) estimates that about two-thirds of all water used by data centres is linked to electricity generation, and about one-fourth tied to on-site cooling, according to a peer-reviewed commentary published in AGU Advances in January 2026 by researchers Ana Pinheiro Privette, Ana Barros and Ximing Cai of the University of Illinois Urbana-Champaign.
AI companies rely on primarily two options for cooling – evaporative towers, which use water evaporation to lower air temperature, and closed-loop cooling, where water circulates in sealed systems rather than evaporating.
Closed-loop cooling eliminates direct water loss, but it comes at an energy cost because these systems require a lot more electricity than the alternative evaporative towers, The Atlantic reported.
Since generating electricity is itself water-intensive, demand is displaced rather than removed.
Another parameter reported by companies is water-use efficiency, which is essentially the ratio of water usage to energy consumed.
Also read: New York becomes first US state to freeze large data center construction over rising power costs and water use concerns
Amazon reported a water-use efficiency of 0.12 litres per kWh in 2025, down from 0.15 litres in 2024. By its own account, Microsoft’s figure was 0.27 litres in its most recently reported fiscal year.
The broader industry average stands at around 0.84 litres per kWh, according to Amazon Web Services, which adjusted an academic estimate to produce the figure.
But even these comparisons may not be level. Amazon’s metric, Bloomberg reported, includes discharged wastewater, which most competitors exclude.
Fundamentally, water usage effectiveness is tracked by fewer than one-third of data centre operators, the commentary published in AGU Advances said.
The expansion of data centres, driven by the AI boom, has stirred up opposition.
The protest was followed by demonstrations in Andhra Pradesh’s Visakhapatnam, where community groups are alarmed by a proposed facility adjacent to the Mudasarlova reservoir, the city’s primary drinking water source, according to The Hindu.
In Australia, New South Wales has approved all 10 data centre applications it reviewed since 2021, for a combined potential draw of 9.6 gigalitres of clean water per year — nearly 2% of Sydney’s maximum water supply. Fewer than half the approved applicants explained how much water they planned to offset through alternative sources, Reuters reported.
