Microsoft points to lower water use in AI era

Driving the news: Microsoft said its newest AI-focused data center designs — first unveiled in 2024 — do not consume water for cooling during normal operations.

• The move is part of a broader effort that the company says has helped improve its water efficiency by nearly 90% since the early 2000s.
• The company also said it replenished more water globally in fiscal year 2025 than it used across its operations, a milestone toward its goal of becoming water positive by 2030.

State of play: Microsoft's newest AI data centers continuously recirculate coolant directly to the chips and use air-cooled chillers outside the building, eliminating the need for water-consuming cooling towers during normal operations.

• The result, Microsoft says, is that the systems require an initial water fill but do not consume water during normal cooling operations.

Between the lines: Much like the other tech companies' recent announcements, the information is not entirely new.

• Instead, Microsoft is compiling years of cooling technology improvements and water stewardship work as opposition to data centers intensifies.
• "There's nothing really new here, other than we continue to innovate," Steve Solomon, Microsoft's vice president of data center engineering, said in an interview.
• "This is updating where we're at and it's really an extension to what we issued in 2024, which was an extension to the years before that."

Friction point: What is new is opposition.

• Roughly 70% of Americans oppose building data centers in their communities, according to Gallup polling released in May, with water and energy concerns the top two reasons.

What they're saying: "I have community [members] ask me questions about it, and if I come across and say we don't use water, they look at me like this guy's full of it," Solomon said.

• "But the reality is, the data centers that are getting all the press on the AI — we do not consume water."

Yes, but: Most of Microsoft's existing data center fleet still uses some water for cooling. The company says many facilities rely on systems that use outside air and only periodically require water.

• In Phoenix, for example, some of Microsoft's data centers use an evaporative cooling system that relies on water when temperatures exceed roughly 85 degrees Fahrenheit, Solomon said.

• Microsoft said approximately 90% of its current owned data center fleet already operates with low- or zero-water cooling systems.

How it works: Operators generally balance water consumption against electricity consumption when choosing cooling methods for the entire building.

Zoom out: Water use inside a data center is only one piece of a broader debate. Producing the electricity needed to run AI infrastructure can also require significant amounts of water, depending on the power source.

Reality check: To support the rapid AI buildout, Microsoft, along with other tech giants, is increasingly turning to natural gas-fired electricity, which does require more water compared to wind and solar, which require essentially none.

• Chevron announced a 20-year deal with Microsoft earlier this week to provide gas-fired power for a major West Texas data center project.
• Solomon said that right now their main focus is on water use at the data center itself, not water associated with electricity.

What we're watching: Nvidia said earlier this week its latest AI systems could remove the need for any mechanical chilling equipment at all.

• Solomon, commenting on its potential before that Monday announcement, said "that would be the ultimate case."

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