TechTank Podcast Summary

Episode: Why water is important for data centers
Date: January 5, 2026
Host: Darrell West (Brookings Institution)
Guest: Joe Kane (Fellow, Brookings Metro program)

Episode Overview

This episode explores the often-overlooked but critical question: why is water so important for data centers, especially as these facilities power the growth of artificial intelligence (AI) and the digital economy. Host Darrell West speaks with Brookings Metro fellow Joe Kane, author of the paper “AI Data Centers and Water,” to discuss the scale of water use, associated challenges, innovations, and what policymakers and leaders can do to better manage this essential resource.

Key Discussion Points & Insights

The Water Demand of Data Centers

• Data centers are massive energy and water consumers. They require water mainly for cooling the servers that drive AI and digital services.
• Cooling technologies vary by size and location, but air conditioning and evaporative cooling are standard, both depending on reliable water sources. Infrastructure includes chillers, cooling towers, and systems that may draw from surface water, groundwater, or reuse water (01:46–03:09).
• Staggering scale:
  • Typical data center: ~300,000 gallons/day—equivalent to the demand of 1,000 households.
  • Large centers: up to 5 million gallons/day—matching the needs of a 50,000-resident town (03:44).
  • Cooling-related water use in data centers may increase by 870% in the coming years.

“A typical data center uses about 300,000 gallons of water each day. That’s equivalent to demands of about a thousand households ... large data centers can use an estimated 5 million gallons of water each day, which is equivalent to the needs of a town of up to 50,000 residents.” — Joe Kane (03:44)

• Indirect water usage: Not just for cooling but also for power plant operations (to generate electricity) and chip manufacturing.

Innovations for Reducing Water Use

• New cooling approaches:
  • Closed-loop systems reuse water—can cut fresh water use by up to 70%.
  • Immersion cooling reduces water needs by submerging servers in specialized fluids (05:45–07:17).
  • Greater adoption of renewable energy (like on-site solar) ties sustainability efforts together.

“Closed loop cooling systems may reuse wastewater or even harvest rainwater, which can reduce freshwater use by up to 70%. Other design improvements, such as immersion cooling ... help limit water use too.” — Joe Kane (06:23)

• The energy-water nexus: Calls for holistic planning; technology alone can’t solve the problem.

“Leaders do need to think about our water resources alongside other energy and natural resources more holistically.” — Joe Kane (07:01)

The Need for Regional Coordination and Policy

• Local water systems are under pressure:

  • Many water utilities are aging and under-resourced.
  • Challenges include ongoing water use, costly infrastructure (like new pipelines to reach exurban data centers), and regulatory complexity (07:57–09:07).

• Economic and demographic context matters:

  • Over 50,000 local water systems, each with different capacities.
  • Towns with declining populations struggle to maintain infrastructure; fast-growing—especially drought-prone—regions like the southwest face new pressure from data center development (09:42–11:20).

“There’s huge fragmentation and localization to these challenges ... places like Flint, Michigan, Jackson, Mississippi ... have really struggled for decades, not just in a year or two, but decades, to stay ahead of their needs.” — Joe Kane (10:18)

• The call for regionalism:
  • Coordinated, regional planning and capacity-building are essential.
  • Successful joint efforts cited in Las Vegas, Chicago, the Great Lakes, New Orleans, San Francisco, and Loudoun County, VA (AI/data center hub) (11:55–14:03).

Financing, Governance, and Measurement

• Financial risk needs to be shared:
  • Small communities can’t go it alone—need for alternative financing, municipal bonds, and fair water rates (14:45–16:45).
  • Data center operators might need to pay rates reflecting their impact.
• Transparency and measurement:
  • Data centers should clearly disclose water (and energy) needs, assisting communities in planning and mitigation (16:45–17:23).

“It would help communities a lot in terms of their planning process and their management ... just to be more transparent about what their [data centers’] needs are.” — Darrell West (16:55)

• Examples of adaptation:
  • Northern Virginia (Silicon Valley for data centers) faces activism around water and electricity.
  • The new Virginia governor has made data center resource use a policy priority (19:29–20:45).

The Federal Role

• Local burden: Federal government covers only ~10% of public water infrastructure spending, mainly via loans (not grants). Implementation, planning, and investment fall on state and local entities (20:45–22:44).
• Federal roles: Convenor, disseminator of best practices, provider of targeted resources and technical assistance, especially as local fragmentation persists.

Water, Climate Change, and Economic Development

• Water policy is climate policy:
  • Data centers add a new layer to zero-sum water resource battles.
  • Cities must coordinate strategies for economic growth, data center expansion, housing, and climate resilience (23:08–24:21).

“Water policy is climate policy and vice versa ... places cannot indefinitely and indiscriminately keep building more data centers, more housing, and striving for more economic growth overall without bearing in mind these fundamental resource concerns.” — Joe Kane (23:10)

Timestamps for Key Segments

• 01:46 — Why data centers need water and the role of cooling.
• 03:44 — Scalability of water use; potential 870% increase.
• 05:45 — Technological solutions (closed-loop, immersion cooling, renewables).
• 07:57 — The necessity of regional coordination; local challenges.
• 09:42 — Who faces the biggest water challenges and why.
• 11:55 — Infrastructure upgrades, green infrastructure, and regional thinking.
• 14:45 — Financing infrastructure; spreading financial risk.
• 16:45 — Transparency and measurement.
• 19:29 — Case study: Northern Virginia.
• 20:45 — Federal government’s limited role and possible interventions.
• 23:08 — Water in the context of climate change and natural disasters.

Memorable Quotes

• “A typical data center uses about 300,000 gallons of water each day. That’s equivalent to demands of about a thousand households.” — Joe Kane (03:44)
• “Closed loop cooling systems may reuse wastewater or even harvest rainwater, which can reduce freshwater use by up to 70%.” — Joe Kane (06:23)
• “There’s huge fragmentation and localization to these challenges.” — Joe Kane (10:18)
• “Water policy is climate policy and vice versa ... places cannot indefinitely and indiscriminately keep building more data centers ... without bearing in mind these fundamental resource concerns.” — Joe Kane (23:10)
• “It would help communities a lot ... just to be more transparent about what their [data centers’] needs are ... so that people understand what the issues are.” — Darrell West (16:55)

The Takeaway

The water needs of data centers are immense and rising rapidly, presenting both a challenge and an opportunity. While technology is offering promising ways to reduce the burden, the podcast emphasizes that regional coordination, sustainable infrastructure investment, transparent planning, and regulatory innovation are essential. Data center expansion can only be sustainable in the context of a holistic approach that merges technical, environmental, and economic planning—making water management a linchpin of the digital and climate future.