The U.S. data centre boom is reshaping infrastructure across the country, unleashing billions in construction as tech giants race to capitalise on the artificial intelligence (AI) surge. Together, leading Big Tech firms have announced nearly US$350 billion in planned capital expenditures. While questions remain about the long-term sustainability of these investments, construction is showing no signs of slowing. In June 2025 alone, the value of data centre construction hit US$3.5 billion, according to the U.S. Census Bureau — an eye-popping 232% increase from June 2022, just months before the launch of ChatGPT.
But amid this rapid growth, one critical issue remains largely overlooked: water. Water is essential for data centre cooling, yet it’s often treated as an afterthought compared to electricity availability. This oversight has serious implications. Most major data centres rely heavily on municipal water systems, with an estimated 97% of water usage sourced from third-party utilities. As the industry shifts toward massive hyperscale facilities — and as buildouts accelerate — local water infrastructure is increasingly under pressure.
Many of these utilities are already underfunded, ageing, or ill-equipped to handle such spikes in demand. The result is a growing strain on public systems that were not designed with AI-driven infrastructure in mind. In water-scarce regions like the Southwest U.S., the challenge is even more acute.
The arrival of a data centre campus can bring tangible benefits to local communities, often accelerating long-delayed water system upgrades
But it’s not all bad. The arrival of a data centre campus can also bring tangible benefits to local communities, often accelerating long-delayed water system upgrades and unlocking new funding sources. In many cases, the influx of capital tied to these projects has helped jump-start long-overdue infrastructure improvements. In The Dalles, Oregon, for example, Google committed US$28.5 million to public upgrades — including new wells, reservoirs, a pump station, and a sewer lift station. In return, the company withdrew more than 461 million gallons of water from the city in 2024, representing about 4.7% of its total data centre water usage that year.
These types of partnerships can offer critical lifelines to communities, especially when structured transparently and with long-term planning in mind. Bluefield Research projects that water-related infrastructure spending by data centre operators will reach US$313 million in 2025 — and grow by 42% to US$443 million by 2030.
Faced with rising scrutiny and growing operational risk, tech companies are beginning to take water management more seriously. Water reuse is emerging as a leading strategy. Amazon Web Services (AWS), for instance, aims to use reclaimed water at 120 sites by 2030, a goal that will require significant investment in wastewater treatment and purple pipe networks.
Although much of the hype surrounds Big Tech companies, colocation providers — such as QTS Realty Trust, Vantage Data Centers, Aligned Data Centers, and Digital Realty — play a pivotal role in the data centre industry and are also advancing innovative solutions. Digital Realty, for instance, has partnered with Ecolab to deploy an AI-driven water conservation platform across its U.S. facilities, signalling a broader industry shift toward smarter, more sustainable practices.
Water — and the infrastructure behind it — can no longer be an afterthought in data centre planning. The pressures are real, especially for communities that are already vulnerable to water stress. But there’s also opportunity. With the right policies, partnerships, and technologies in place, the rise of AI infrastructure could serve as a catalyst for overdue investments in community systems. As Big Tech pursues ever more reliable and sustainable operations, the potential exists not just to reduce strain — but to build resilience, together.