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Key Points

AI data centers are projected to cause an 11-fold increase in global water consumption by 2028 according to Morgan Stanley. The water footprint spans cooling systems, electricity generation, and semiconductor manufacturing processes. More than half of the world's major data center hubs are located in regions already facing water scarcity risks. This localized impact poses significant challenges for sustainable AI industry growth.

Key Points: AI Data Centers to Drive 11-Fold Water Consumption Rise by 2028

  • AI data centers could consume 1,068 billion liters annually by 2028
  • Electricity generation accounts for largest water use share
  • Over half of data hubs in water-scarce regions
  • Semiconductor manufacturing uses 5M gallons daily per facility
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AI data centers to drive 11-fold rise in water consumption by 2028: Morgan Stanley

Morgan Stanley report warns AI data centers could increase global water consumption 11x by 2028, reaching 1,068 billion liters annually, straining water-scarce regions.

"AI data centers to drive annual water consumption for cooling and electricity generation to approximately 1,068 billion liters by 2028 - Morgan Stanley Report"

New Delhi, September 8

Artificial Intelligence (AI) data centers are expected to significantly increase global water consumption in the coming years, according to a report by Morgan Stanley.

The report said annual water use for cooling and electricity generation by AI data centres could reach around 1,068 billion litres by 2028.

"AI data centers to drive annual water consumption for cooling and electricity generation to approximately 1,068 billion liters by 2028 (our base case) - an 11x increase from 2024 estimates," it stated.

The report noted that while water use for cooling data centres is widely acknowledged, the indirect water use through electricity generation remains underappreciated. AI's broader water footprint also includes semiconductor manufacturing.

Facilities involved in semiconductor production can consume as much as five million gallons of ultrapure water every day, highlighting the industry's dependence on water-intensive processes.

The report also said water consumption estimates depend on several factors, including assumptions around water intensity, consumption factors, cooling technologies, and regional energy mix.

As operations adopt more efficient solutions, these figures could change. To reflect this uncertainty, the report presented three possible scenarios. Under these, AI's water use could vary between 637 billion litres and 1,485 billion litres annually by 2028.

The water footprint of AI extends across three scopes. Scope 1 relates to on-site data centre cooling, scope 2 to electricity generation, and scope 3 to semiconductor manufacturing.

Electricity generation (scope 2) typically accounts for the largest share of water use, followed by cooling (scope 1) and semiconductor production (scope 3).

Although AI's overall global water consumption may appear modest, the report highlighted that the impact is highly localised.

More than half of the leading global data centre hubs are situated in regions that already face medium risks linked to water scarcity, drought, flooding, and declining water quality.

Similarly, many secondary markets and emerging data centre hubs are located in areas with high or very high water stress.

The report stressed that water consumption is a rapidly evolving issue for the AI sector.

It stated "More than half of the world's top data center hubs are in areas already facing medium basin physical risk (i.e., medium level vulnerability) to threats from drought, flooding, and declining water quality".

With the increasing demand for cooling and electricity generation, managing water resources efficiently will remain critical for the industry's growth and sustainability.

- ANI

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Reader Comments

R
Rohit P
Technology companies need to invest in water recycling and conservation technologies. In a country where farmers struggle for irrigation water, we can't let data centers drain our resources without sustainable practices.
A
Arjun K
While AI development is important for our economy, we must balance progress with environmental responsibility. Maybe data centers should be located in regions with better water availability rather than tech hubs like Bangalore which already faces water issues.
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Sarah B
The semiconductor manufacturing water consumption is staggering - 5 million gallons daily! This report shows we need to think about the entire supply chain's environmental impact, not just the final AI applications.
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Vikram M
Good that Morgan Stanley is highlighting this issue. Indian tech companies should lead in developing water-efficient cooling technologies. This could be a great opportunity for innovation and creating sustainable solutions that benefit the whole world. 🌍
M
Michael C
The localized impact point is crucial. While global numbers seem abstract, when data centers are built in water-stressed areas, the community impact is immediate and severe. Environmental impact assessments must include water resource evaluation.

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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