AI and Water: Why Data Centers Matter for Local Supplies

Microsoft made a public pledge to be water positive by 2030 and has worked to cut water per unit of energy. From 2020 to 2024 its reported water use rose from about 7.9 billion liters to about 10.4 billion liters, and internal forecasts once estimated it could reach 28 billion liters by 2030. After engineering changes and better data, the company updated that outlook to roughly 18 billion liters. These figures have raised questions because many Microsoft data centers sit in places with limited water supplies, such as Phoenix and near Jakarta.

The company has invested in new cooling technologies that reuse water in a closed loop and in chip‑level cooling that reduces evaporation. While closed‑loop designs still require water during construction, they avoid ongoing freshwater evaporation and can lower Water Usage Effectiveness. Microsoft plans pilot projects for its zero‑evaporation design in Phoenix and Mount Pleasant, Wisconsin, and it reports steady improvement in fleetwide water efficiency. Although the shift can increase energy use slightly, the company says it will balance that with other efficiency measures and reclaimed water where possible.