Why hyperscalers are putting water at the heart of data center growth plans
Published
Jul 2025
To keep their components cool, data centers need water and lots of it. Every day, the biggest data centers can use half a million gallons, nearly enough to fill an Olympic-size swimming pool. With the rapid growth of artificial intelligence (AI), hyperscale data centers — those with power capacities over 10 megawatts — are proliferating and demanding increasingly more.
Operators need to find sites with a reliable source of water, optimize its use and secure a permitted and practical way to discharge it. Some are finding increasingly creative ways to do that. Lucy Pugh, our global industrial water practice lead, and Rachel Hanson, senior wastewater process design engineer for the eastern United States, explore how data center operators can meet this challenge while being responsible corporate citizens.
Why do data centers need so much water?
Alongside land and power, water is core to a viable data center. Data center servers generate intense localized heat — with typical server racks dissipating between four and six kilowatts of heat per rack, and high-performance computing clusters often exceeding 15 kilowatts per rack — which can degrade performance and damage electronic components if not cooled. Most data center operators prefer water to air cooling as it offers more efficient heat transfer, uses less energy and allows more servers to fit in the space.
Cold water from an external source enters the data center and flows through a network of pipes and heat exchangers. As it passes through cold plates mounted on server components, heat is transferred through the plates and into the water, which is carried away to an external cooling system. There, heat is released to the air via fans and evaporation.
Water can then be recirculated, but only up to a point. It contains minerals like calcium and other salts, which become concentrated over cycles of evaporation. Once these total dissolved solids (TDS) reach levels that can scale or corrode pipes, some of it must be discharged and replaced with fresh water.
Siting data centers near a secure water source
Most data centers source from a municipal potable water supply, directly from natural surface water bodies or from groundwater. Hydrological assessments are usually necessary to prevent withdrawals from placing undue stress on local water systems.
An increasingly popular alternative is treated wastewater from homes or industry. This is especially valuable where natural resources are scarce, as it reuses water and doesn’t place additional demands on local freshwater supplies. However, it involves additional resources and infrastructure to remove contaminants so that it’s clean enough for cooling systems. Even then, it’s likely to have higher mineral content than freshwater, meaning fewer cycles before it needs to be discharged. Evaluating these trade-offs must form part of any data center site assessment.
Permission to discharge
The other critical element of siting is securing a viable, permitted route and location to discharge. Permitting can be a complex process that takes up to a year, so it’s important to engage early with regulators to understand discharge requirements before treatment systems are designed.
Data center cooling water circulates through a closed loop of pipes, meaning it doesn’t pick up pollutants like water used for industrial purposes would. Nonetheless, some treatment is needed as total dissolved solids, cooling treatment chemicals, and higher discharge water temperatures can impact ecosystems and harm sensitive aquatic life.
Solutions can sometimes be secured through agreements with municipal wastewater treatment plants, but these are usually designed for domestic wastewater and may not have processes suited to dealing with issues like high salinity. To secure a discharge permit, data centers may need their own treatment and monitoring systems to prepare for discharge into natural water bodies.
What makes a sustainable data center site?
The above scenario imagines that water is readily available in the first place. In reality, it is a finite resource and new sites with abundant water nearby are increasingly hard to come by. As data centers proliferate, operators will need to think more creatively about securing their supply while minimizing environmental impact.
This could involve co-locating the data center near sources of industrial or municipal wastewater that could be reused for cooling. Such partnerships could also extend to selling ‘waste heat’ from the data center to local industry or district heating initiatives. Siting near renewable energy sources could allow more air cooling, a process that requires energy to power fans. Siting in colder regions could reduce the energy needs for cooling.
LUMI, the fastest supercomputer in Europe, sits approximately 155 miles (250 kilometers) south of the Arctic Circle in Kajaani, Finland. There it runs on hydropower and discharges heat into a district heating system that supplies 20 percent of the city’s heating needs. Though less common, similar district heating initiatives exist in countries including Denmark and Ireland.
Such arrangements go beyond a typical data center plan, requiring additional upfront investments, careful navigation of local regulations and strong community and municipality relationships. Yet novel, expansive approaches such as these are critical to the industry’s sustainable growth.
Manage and optimize water flow with AI
Securing and disposing of water are the biggest challenges data centers face in this area. But much can be done with new technologies to improve what happens in between.
Many operators overcool — or overuse —water to err on the side of safety. AI systems can match water temperature and flow to real-time cooling needs. Alternatively, they can switch between air and water cooling in response to ambient air conditions or availability of clean energy. Both could hugely reduce energy and water use.
AI can also help to optimize dosing of the chemicals used to prevent scaling and bacterial growth in cooling towers. Automated dosing would be a quick win for cutting chemical use and improving discharge quality.
Be ready to navigate complexity
Data centers are designed to operate for decades and will need water every day of that lifespan.
Success demands a grasp of the full water lifecycle, from sourcing and treatment to circulation, discharge and reuse. Critically, it depends on good relationships with a complex network of stakeholders. On one hand, data centers need to secure agreements with municipalities, local industries or regulatory agencies to access potable water, surface water, groundwater or wastewater, and in some cases, to sell their waste heat. On the other hand, they must reassure regulators and local communities that they can discharge safely.
As data centers expand to power the AI revolution, their impact on the planet will face increasing scrutiny. By understanding the full range of possibilities around data center siting, operators can secure the water they need, minimize their environmental impact and support local communities, providing a sustainable path to deliver their ambitious growth plans.
To learn more, please contact our global water and data centers lead.