A July 2026 report from the Information Technology and Innovation Foundation.
The thesis
"Technology exists, and policy instruments are available, to develop a new, state-led model of water governance for data centers and other large industrial users. What's missing is institutional coordination, regulatory specificity, and a set of standardized mechanisms and metrics."
The framing locates the problem in governance rather than in engineering or in scarcity — which is what distinguishes it from both the alarm and the dismissal in the public debate.
The quantitative claims
- Two consumption channels. "Data centers consume water both directly for cooling and indirectly by generating electricity. Indirect consumption is more than 10x direct consumption, but overall, data centers account for a very small fraction of total U.S. consumption."
- Direct use is solvable now. "New technologies now make it possible to consume almost zero water directly for data center cooling. They are a bit more expensive, but close-to-zero water consumption is possible. Some hyperscalers are adopting zero-water designs."
The two together produce the report's implicit critique of the debate: public attention concentrates on cooling water, which is both the smaller share and the one with an available technical fix, while the larger share is a function of the electricity mix.
This bears directly on the siting disputes described in Data Center Siting / AI Power Politics, and matches the assessment in Newman's survey that water concerns are "in most cases significantly overstated" while grid and generation issues "have more validity."
Relationships
- supports: AI Data Centers — quantifies the direct-versus-indirect split underlying water claims
- related: Data Center Siting / AI Power Politics — bears on the moratorium and permitting disputes
- related: Anecdotes Everywhere, Evidence Almost Nowhere (Steve Newman, July 2026) — converging assessment that water is the weaker of the environmental objections
- related: New York Data-Center Moratorium (2026), NAACP v. xAI (Clean Air Act gas-turbine suit)