Much of the discourse around data centers is about their skyrocketing energy use. However, a New York Times report revealed that rising water usage is an overlooked and underreported problem for tech giants like Microsoft.

What's happening?

The Times reported that, in internal documents, Microsoft predicts a significant increase in its water consumption. This is especially significant as it is occurring in water-strapped regions.

Microsoft's data center construction has increased, and most of these figures don't account for new projects in the last year. Detailed information on the actual water usage of these centers is limited, and the investigation makes clear that companies like Microsoft are under no obligation to be transparent.

They also don't account for water usage that comes as a result of the power generation from plants that use water to cool their energy. Experts say it could potentially triple the effect of data center usage.

The Times highlighted three areas — Phoenix, Arizona; Jakarta, Indonesia; and Pune, India — as examples of where Microsoft's data centers guzzle water that is in high demand. Microsoft revealed that 46% of its total water usage takes place in water-needy areas.

While the investigation revealed that Microsoft is revising down its estimates for future water usage and taking its consumption more seriously, that wasn't the case in the past.

Priscilla Johnson, a former director of water strategy at Microsoft, said the resource is "very much an afterthought."

"Energy was more the focus because it was more expensive," Johnson told the Times. "Water was too cheap to be prioritized."

Why is Microsoft's water usage important?

Water is a pressing local issue for many residents near data centers, even as the overall number is a drop in the bucket.

"The fact that it is a very, very, very tiny part of the global consumption doesn't really matter if you need more than we have in the area," said Conrad Reddick, a utility commissioner in Illinois.

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Much of the water used by data centers evaporates and is lost forever. While Microsoft invests in ways to replenish water to offset its water usage, its 2024 public environmental report admitted difficulties in doing so. Failing to deliver on their pledges would be a textbook case of greenwashing.

Areas like Pune and Jakarta already face issues accessing safe drinking water, and rising water usage should only make matters worse.

What's being done about data centers' water usage?

Microsoft and other tech companies are involved in numerous projects to address their water impact, such as wetland restoration and providing water-saving technologies.

Regulators are pushing for more transparency around water consumption by tech giants. Locals can also make their voice heard and protest data centers that are impacting their quality of life.

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