JPMorgan Warns: AI Boom Straining America’s Water Supply
Large data centers, on average, can consume as much water daily as a town with a population of 10,000 to 50,000 people. This significant demand for water is further exacerbated by the rapid growth of artificial intelligence (AI) in the United States, according to a recent report by JPMorgan Chase and consultancy ERM. The report emphasizes the urgent need for better water resource management to address the strain placed on the nation’s water supply.
The expansion of AI-driven technologies, including data centers and semiconductor manufacturing, is contributing to an increasing gap between water supply and demand. Neglecting the water needs of AI and other industries could lead to severe consequences, as highlighted in the report published on Oct. 28.
The primary drivers of increased water demand in the United States include population growth and demographic shifts towards warmer regions facing water scarcity challenges. The reshoring of manufacturing and the rise of AI-based data centers are further straining water resources.
Data centers, in particular, require substantial amounts of water from drinking water sources to cool servers generating heat. A mid-sized data center can use around 300,000 gallons per day, while larger facilities may consume 1 to 5 million gallons daily, equivalent to the needs of a town with a population of 10,000 to 50,000 people.
In 2023, data centers in the U.S. consumed over 75 billion gallons of water, with around 20% drawn from stressed watersheds, posing risks to the technology industry, communities, and the environment. The report highlights that the impact of AI on water resources extends beyond cooling technologies in data centers.
Manufacturing semiconductor chips for data center operations requires significant water usage and generates toxic wastewater, presenting additional challenges for water management. As semiconductors are fundamental to the AI supply chain, the report stresses the importance of future water management in their operations.
The strain from AI-driven demand adds to a range of water-related risks, including the potential for stranded business assets due to insufficient supply or stricter regulations. The report from JPMorgan and ERM advocates for increased investment in water infrastructure to address the annual funding gap of $91 billion.
Innovative technologies like waterless cooling systems for data centers and advanced wastewater recycling solutions for semiconductor manufacturing could help alleviate water scarcity and stress, according to the report.
