U.S. data centers directly consumed 17.4 billion gallons of water in 2023 — equivalent to the annual usage of roughly 160,000 American households. A single large data center can consume up to 5 million gallons per day, matching the water needs of a town of 10,000 to 50,000 people. And the trajectory is sharply upward: annual direct consumption is projected to reach between 38 and 73 billion gallons by 2028.
A new study published in AGU Advances highlights a critical transparency gap. Data centers remain among the least transparent industrial users of water, with most companies disclosing only partial or aggregate figures rather than facility-level data. The United States scored just 53 out of 85 on a water insecurity index, with the report noting that widespread water-efficiency policies have yet to be implemented despite the significant growth projected for 2026 onward.
The Cooling Connection
Water consumption is intimately tied to cooling technology choices. Evaporative cooling systems — still the dominant approach in many facilities — consume the most water. Closed-loop cooling systems can reduce freshwater use by up to 70%, while immersion cooling and advanced air-cooling systems can potentially eliminate water consumption entirely, though at higher capital cost and sometimes lower energy efficiency.
The European Commission has begun exploring an innovative approach: using data center waste heat for water purification and carbon capture, potentially transforming facilities from net water consumers to net water producers. While still in the research phase, this concept represents the kind of fundamental rethinking that the industry's growth trajectory demands.
Regulatory and Reputational Risk
Water consumption is already a primary driver of the moratorium movement, with communities in arid regions particularly resistant to large-scale data center development. For operators and investors, water strategy is no longer just an operational consideration — it is a permitting risk, a reputational risk, and increasingly, a financial risk that affects facility valuation and long-term viability.