A top Nvidia executive says water concerns surrounding data centers could be largely addressed by the company's next generation of AI infrastructure.

Why it matters: It's a bold claim with high stakes by the world's dominant chip maker. Data centers are facing growing scrutiny for their use of energy and water, and Nvidia's chips are helping drive the AI boom behind much of that demand.

Driving the news: Nvidia announced today at London Climate Week that its latest AI system can be fully cooled with liquid warm enough to reduce the need for additional chilling equipment.

• "The water consumption challenge for data centers is largely solved," said Josh Parker, Nvidia's chief sustainability officer, in an interview last week ahead of his trip to London.

The big picture: Nvidia's announcement comes on the heels of Google and Amazon defending their data center water practices amid growing local opposition to AI infrastructure.

• Tech companies are increasingly arguing that efficiency gains will blunt the environmental impacts of the AI buildout.

Between the lines: Nvidia's latest claim goes further, suggesting that next-generation AI systems could change the underlying cooling equation altogether.

How it works: Nvidia's coolant — a recirculated liquid mixture that includes water and propylene glycol, similar to automotive antifreeze — can run at 113 degrees Fahrenheit.

• Because the liquid can operate at higher temperatures than previous systems, data centers may be able to rely less on chilling equipment that uses large amounts of energy or water — or even eliminate it altogether.

What they're saying: "It would be a big deal for everybody if we got all of the chips to do that," said Steve Solomon, Microsoft's vice president of data center engineering, who was asked about the potential before learning of Nvidia's announcement.

• Solomon said it could eliminate the need for any type of mechanical chiller in most climates most of the time — even in hot places such as Arizona.

Reality check: Even if Nvidia's technology dramatically reduces cooling-related water use, that doesn't mean water concerns disappear entirely.

• The new systems would take years to spread across the industry, and many existing data centers will continue operating older cooling technologies.
• Nvidia declined to discuss the costs of its systems, and the pace of adoption may also depend on the economics of facilities designed for fully liquid-cooled AI infrastructure (though Nvidia says it'll save data center operators money on cooling costs).

What's next: Nvidia's technology could make each unit of AI computing far more efficient, but the company is also explicit that those gains are meant to support more growth.

What we're watching: Efficiency gains may reduce the water and energy needed for each AI system. Those same gains could also accelerate the buildout of AI infrastructure and increase the industry's overall footprint.

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Here's what struck us about FERC's instructions to regional grid operators last week to do better at quickly connecting data centers while protecting ratepayers.

Why it matters: The formal orders are FERC's most sweeping yet specific move to enable the AI boom amid public backlash to data centers.

Catch up quick: On Thursday, FERC issued "show cause" orders that tell grid operators to improve policies on topics like ensuring developers cover grid costs (via "cost recovery agreements"); faster interconnection studies; and carrots for projects that can be flexible in their power use.

Some early takeaways ...

🍻 It's popular so far. It's not often a power policy wins praise from parties ranging from the pro-coal group America's Power to the Natural Resources Defense Council.

• That's partly because it's unclear how exactly the grid regions — called Independent System Operators and Regional Transmission Organizations — will respond.

🏇 Speed and caution both won. FERC stopped short of Energy Secretary Chris Wright's call for wide new, national rules.

• The "show cause" orders are a quicker process than a formal rulemaking, and FERC is also avoiding a head-on battle over state jurisdiction, analysts say.
• But it's still a big undertaking. FERC has never ordered all grid operators (minus Texas) to "figure out answers to a complex set of interrelated questions in such a short period of time," said Allison Clements, a former Democratic FERC member.

🏆 It looks like a win for tech companies. TD Cowen analyst John Miller, in a note, calls it positive for data center developers and the industry push to locate new generation next to new data centers.

• Says Clement: "Never, I think, in FERC's history have one industry's needs and barriers been given such a prominent voice at the table so quickly."

What we're watching: It will lead more states to follow the trend of creating special electricity rate classes for "large loads" like data centers, writes Shuting Pomerleau, a researcher with the center-right American Action Forum.

What's next: The orders seek initial responses within 60 days, with added information on "resource adequacy" for new and existing large loads within another 30 days.

The American Petroleum Institute is unveiling policy goals today for upgrading and expanding oil infrastructure outside the Strait of Hormuz.

Why it matters: The powerful lobbying group's energy security "framework" — if acted on — signals how the disruption could bring lasting market changes.

The ideas include...

🛢️ Upgrading the Strategic Petroleum Reserve. API head Mike Sommers says it's engineered for a bygone era, and needs better connections to major producing basins, and that it should be able to release oil at higher volumes.

⚓ Changing the Jones Act process. Reminder: the law requires U.S.-built and crewed ships to move fuel between domestic ports. The waiver process — which the White House used during the crisis — should be clearer and easier to implement, he said.

🌎 Boosting Western Hemisphere supply lines. There's space for more trade, investment, and diplomatic initiatives to move oil around as production grows in regions including Guyana and Venezuela, API argues.

🏗️ Expanding Middle East routes. Another idea is greater U.S. support via its development finance agencies for expanded pipeline networks to reduce reliance on the strait.

Catch up quick: The framework includes longstanding API goals like completing a wider offshore leasing plan and a Capitol Hill permitting deal.

The bottom line: Policymakers should "start thinking bigger about energy security" and what unfolded in the strait, Sommers said in an interview.

🌎 DCVC is raising $1.3 billion across its flagship seventh fund and a second energy and climate fund. Go deeper

⚛️ Commonwealth Fusion Systems received a "nine figures" investment from Abu Dhabi's Plynth Energy fund, an industry source said. Go deeper

⚛️ Deep Fission, which aims to install next-gen nuclear reactors deep underground, raised $40 million in an IPO that was far smaller than its initial target. Go deeper

♻️ Amp Robotics, which sorts waste using AI and robots, is raising up to $75 million via a convertible note from existing investors. Go deeper

🧠 Aston Power, an energy provider for data centers, raised $20 million in Series A funding. Go deeper

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That's how much Bloomberg Philanthropies just pledged for initiatives to expand clean energy deployment in emerging and developing economies.

Why it matters: "Fixable obstacles are still slowing down deployment" even as power demand rises, Michael Bloomberg said in a statement.

What's next: The money will support growth of industry associations, help with technical assistance for governments and regulators, and more.