Nvidia aims to cut data center water use, but that won't fix AI's water problem

Nvidia has announced a warm-water cooling system that it claims can significantly cut water consumption in data centers. According to an Nvidia executive quoted in a press release, the system eliminates "pretty much all water usage" within the data center itself.

"The water consumption challenge for data centers is largely solved," Josh Parker, Nvidia's chief sustainability officer, recently told Axios.

But that's only part of the story. As long as AI data centers rely on fossil fuels — a choice tech companies are increasingly making — the water savings stop at the data center's walls.

The core issue lies in how Nvidia measures data center water consumption. According to its blog post, the company draws a boundary around the data center: everything inside is counted, everything outside is ignored.

To be fair, Nvidia's system does appear to deliver on its facility-level promise. The coolant runs in a closed loop, filled once and recirculated for the facility's lifetime, so no new water is consumed to cool the chips. In favorable climates, the company says, this can lead to a 100% reduction in on-site water usage.

TechCrunch has asked Nvidia for clarification, and we will update this article if we receive a response.

The problem is that water use outside the data center — mainly in electricity generation and chip manufacturing — can double or triple the total water footprint of a facility. That means Nvidia's solution addresses roughly a quarter to a third of AI data centers' total water consumption.

The new system is clever: it pumps coolant into racks at 45°C (113°F). That's hot for humans but not for computer chips. After passing through a server, the coolant exits at 55°C (131°F), Nvidia said, carrying a significant amount of heat away from the hardware.

At that temperature, outside air in most climates can draw heat off passive radiators without evaporative cooling or, in some cases, even fans. A data center without fans or chillers would not only use less water but also be more efficient and quieter.

But no data center can operate without an electricity supply, and many types of power plants are themselves major water consumers.

Fossil fuel power plants are among the largest water users in the U.S., consuming 2.7 billion gallons per day, according to the U.S. Geological Survey — most of it for evaporative cooling. Natural gas plants use 1.17 liters of water per kilowatt-hour of electricity generated, according to a recent study. Coal plants are even more water-intensive, using 2.2 liters per kilowatt-hour. Fossil fuel power plants collectively generate about half of all data center power today, according to the IEA.

Hydropower dams, which supply about 10% of data center power, do not consume water directly, but evaporation from their reservoirs leads to about 6.8 liters lost per kilowatt-hour generated. Geothermal, a source tech companies are beginning to explore, varies widely — it can be higher or lower depending on the specific technology. Some enhanced geothermal startups, like Fervo, have pledged to use mostly "degraded" water that would otherwise go unused.

Wind and solar power, on the other hand, use vanishingly small amounts of water, about 0.01 liters and 0.03 liters per kilowatt-hour, respectively — figures that include water needed for manufacturing and cleaning solar panels.

While renewables are providing a growing share of new electricity capacity, natural gas and coal are expected to supply more than 40% of the new electricity needed to meet data center demand through 2030, the IEA projects. Without major changes to that trajectory, data centers will still consume large amounts of water, regardless of what Nvidia does inside its walls.