Majority of New AI Data Centers in the U.S. Built in Drought Zones

An analysis of data from the U.S. National Oceanic and Atmospheric Administration (NOAA) shows that 517 of the 809 new data centers planned for construction will be located in areas that faced water shortages over the past 12 months. This raises concerns among experts, as AI infrastructure demands significant resources not only for server cooling but also for semiconductor manufacturing and power generation.

According to a report by Xylem and Global Water Intelligence, by 2050, only 4% of the additional water consumption linked to AI development will be attributed to data center cooling. The primary burden will fall on chip production (42%) and power generation (54%). For instance, modern semiconductor fabrication plants consume between 2 to 10 million gallons of water daily, with ultra-pure water production requiring 40–60% more resources than municipal systems provide.

The situation is further complicated by the fact that many data centers and factories are located in the same drought-prone regions. For example, three TSMC plants in Arizona, the fourth driest state in the U.S., will consume up to 16.4 million gallons of water per day once fully operational. While the company offsets some usage through recycling systems, this does not fully address the resource scarcity issue.

Experts note that transitioning to liquid cooling, such as Nvidia’s GB200 NVL72 systems, could reduce water consumption at the server level by 300 times compared to air cooling. However, the surge in energy demand—up to 600 kW per server rack in new platforms—increases the strain on power plants, which also require substantial water for operation.

Some states are taking action: California, Michigan, and Iowa are considering laws mandating water usage reporting, while New York is discussing a moratorium on data center construction. However, these initiatives address only a fraction of the problem, leaving the primary drivers of water consumption—chip production and energy generation—largely unchecked.