Public fear about data centers draining local water supplies is largely misplaced. New facilities using closed-loop cooling technology have minimal water consumption. For example, the massive Stargate campus in Abilene is projected to use less water in a year than a McDonald's restaurant.

Public outrage over data center water usage is fueled by large, decontextualized numbers. In reality, total U.S. data center water use is a fraction of that used for golf courses, almond farming, or even water lost annually to leaky pipes, revealing a major perception vs. reality gap.

Counterintuitively, data centers in arid regions like Arizona can be a net positive. They generate up to 50 times more tax revenue per gallon of water used than industries like golf, making them a highly efficient economic replacement.

An innovative closed-loop cooling system at Meta's Wyoming data center, designed to save water, is under investigation. A local utility alleges it introduced bacteria into the wastewater system, creating a new regulatory and public relations challenge for this sustainable technology.

Governor Hochul's ban on data centers cites impacts on land, water, and noise. However, modern facilities are highly land-efficient, use closed-loop water systems with minimal consumption (equal to 2.5 In-N-Outs), and can generate their own power, making the official justifications largely a pretext.

To circumvent growing local opposition and permit denials related to water and power usage, data center developers are pivoting to off-grid strategies. By building self-sufficient facilities powered by natural gas turbines and fuel cells, they aim to eliminate community impacts and sidestep political and regulatory hurdles slowing traditional projects.

While $100 oil has blunted the momentum of traditional anti-oil ESG initiatives, the underlying philosophical objections persist. This sentiment is now shifting its focus to a new target: the massive energy and water consumption of AI data centers, framing them as the next environmental battleground.

Meta is partnering with Overview Energy to beam 1 gigawatt of solar power from space to Earth. This ambitious strategy aims to provide constant, around-the-clock power for its data centers, bypassing the intermittency of ground-based solar and highlighting the critical need for novel energy solutions to support AI's growth.

Contrary to public perception, modern liquid cooling does not waste water. It uses a sealed, closed-loop glycol system that rejects heat through giant external radiators, much like a car. A massive data center's water usage for this system is minimal, comparable to that of a single family home.