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Everyone knows artificial intelligence is energy hungry. Turns out it’s thirsty too. Today’s newsletter looks at the strain data centers are putting on water resources. You can read and share the full version of the story on Bloomberg.com. For unlimited access to climate and energy news, please subscribe

AI is thirsty

By Michelle Ma

You might not realize it, but every time you ask an AI chatbot a question, a data center is forced to guzzle water. To be precise, a data center requires about a 500-milliliter bottle of water to generate 10 to 50 medium-length GPT-3 responses, according to one analysis. Generating an image uses substantially more water than text, and a video uses dramatically more than an image. 

Here’s why: Data centers need a way to cool their servers to prevent them from overheating. One of the main methods of doing this is through cooling towers that evaporate water. Data centers also consume water indirectly through electricity generation, since the power plants that feed them energy also need to be cooled.

This is all well-documented, and there’s been a ton of research out there on how much water data centers consume in aggregate. But my team wondered where these data centers were in relation to local water resources. After all, we know data centers are often strategically sited near robust energy resources: Would the same be true for water?

A data center in Odessa, Texas. Photographer: Justin Hamel/Bloomberg

To answer this question, my colleague Leonardo Nicoletti got his hands on data from market intelligence firm DC Byte that showed us the existing and planned data centers globally. He mapped that over data from the World Resources Institute illustrating global water stress – which quantifies competition over water resources from different sectors like agriculture, cities and industrial users.

What he found was surprising: Data centers in the US and around the world are disproportionately built in highly water-stressed areas. The AI boom has only made it worse: Two thirds of new data centers built or planned since 2022 are in places that already have high competition for scarce water resources. 

We wanted to know why this was the case, and so I spoke to water researchers and data center experts to understand what was happening. Cheap, clean energy is a much higher priority than water. In fact, water is often the last consideration when it comes to siting data centers. And when you combine that with the fact that the sunniest places with the most plentiful renewable resources tend to also be the driest, you have a problem.

Tech companies aren’t ignorant to this dilemma. A number of them have proposed or implemented ways to cool their servers that draw less water. My colleague Dina Bass talked to them for this story. She found that there’s often a tradeoff between cooling systems: The ones that use lots of water require less energy, and vice versa. It’s a tricky balance. 

To find out more about how data centers consume water and what companies are doing to fix the problem, check out the story

Water guzzler

2 million
The liters of water per day that an average 100-megawatt data center in the US uses, according to the International Energy Agency.

Growing concern

"We just had one of the hottest summers on record in Texas, and we've had several of those. I'm concerned about any super water-intensive industry that is going to come into our state."
Jennifer Walker
Director of the Texas Coast and Water Program at the National Wildlife Federation

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Europe’s carmakers will skirt billions of euros of fines for missing 2025 emissions targets after the European Union’s main institutions agreed to grant them an extra two years to comply.

Worth a listen

Australia is in a unique place when it comes to the energy transition. It is the world’s largest exporter of coal and a leading exporter of gas, yet has set a target to have 82% renewable electricity by 2030 and hit net-zero by 2050. The Pacific nation is also caught juggling relations between the US — its military ally — and China — its biggest trading partner — as the two superpowers compete over trade.

It is an unenviable challenge for Prime Minister Anthony Albanese, who has just been voted back into the office with an impressive new majority and also wants Australia to host the COP31 climate summit in 2026.

But the Labor Party’s climate credentials will be put to test very soon, says David Stringer, Bloomberg Green’s Asia managing editor, on this week’s episode of Zero. Listen now, and subscribe on Apple,  Spotify, or YouTube to get new episodes of Zero every Thursday.

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