The truth about data center water usage
Catalyst with Shayle Kann
October 8, 2026
Of all the concerns surrounding the AI boom, data center water usage tops the list. Opponents claim that massive hyperscaler facilities threaten local drinking supplies and drain aquifers.
Speakers Shayle Kann, Tim Shedd
TopicsTechnologyBusinessInvesting
SPEAKER_1 (0:02)
Latitude Media, covering the new frontiers of the energy transition.
Shayle Kann (0:07)
I'm Shayle Kann. I lead early stage investments at Energy Impact Partners. Welcome to Catalyst. So of all the fights over data centers, I think water might be the one where the two sides talk past each other the most. Opponents say data centers are draining aquifers and competing with towns for drinking water. Proponents basically say it's a nothing burger. It's a rounding error next to agriculture, and other major water consumers, and actually new data centers barely use any water at all.
I think there are two things going on here. The first is about context. Say a 300 megawatt data center with evaporative cooling uses like 150 million gallons of water per year.
Is that a big number or a small number? Just for context, a combined cycle power plant of the same capacity would use roughly three times as much water. Or actually maybe even better, 150 million gallons per year is about what you would use on 550 acres of irrigated soybeans. So there's some context. The second though is about history versus future. I think even the data center industry would admit that water consumption was significantly higher in the past. But I'll also tell you that modern designs, which might be closed loop, consume very little water at all, perhaps down to essentially just restrooms and kitchens.
So rather than trying to argue the numbers, I wanted to understand where the water actually goes. What inside a data center needs cooling? What is the challenge there? How did we do it historically? What's changed now that a single rack can draw what used to power a whole row?
It turns out that the answer to how much water the data center consumes is actually mostly a design choice. But it's a design choice being made right now at gigawatt scale, and the old numbers don't actually tell you much about the way it's going. So to walk through it, I talked to Tim Shedd, the founder of Ebullient Insights and an expert data center cooling. That's coming up next.
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Shayle Kann (3:41)
Tim, welcome.
Tim Shedd (3:42)
Thank you. It's great to be here.
Shayle Kann (3:44)
Let's start by having you at the high level walk me through within a data center, what needs cooling and relatedly, what needs water and why.
Tim Shedd (3:53)
That's a big question. But overall, everything needs cooling. Even the little half watt devices sitting on the motherboard that you never think about, if any one of those fail, the servers fail, the power supply fails, whatever. So everything needs cooling and as a thermal engineer, this is something we're focused on, making sure that that cooling gets to everything, including the power supplies, including the network switches, every possible thing. When it comes to water these days, it's really important to keep in mind that this push to cool everything with water is really only about three years old. So everything we're talking about is evolving. It's moving very fast.
And that's going to be part of this discussion, part of many discussions that I have, is understanding, helping people understand that we just don't know the answers to everything. But back to your point, we're going to focus on those high load devices, like the processors.
But other devices that are having a hard time getting cool, like memory and networks, chips and so on, are now also requiring water. And we'll get in to maybe talking about the density, but it's driven by the need to put everything really close together in the racks for networking.
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