As concerns around the water footprint of AI infrastructure grow, ‘waterless cooling’ is gaining attention as a potential sustainability solution. With data centres requiring enormous amounts of cooling, eliminating water consumption seems like an obvious sustainability win.
And increasingly, it is becoming technically possible.
Microsoft has introduced new data centre designs that it says consume zero water for cooling during operation. Using a closed-loop system that continuously recirculates water instead of relying on evaporation, Microsoft estimates these designs could save over 125 million litres of water annually per data centre, based on its FY2024 global average water withdrawal intensity.
It is a significant development, but it raises a bigger question: When we say a data centre is waterless, what exactly have we eliminated, and what have we traded for it?
What Does ‘Waterless’ Cooling Actually Mean?
First, waterless doesn’t necessarily mean there is no water consumption; it simply refers to eliminating water use in specific cooling processes.
As AI workloads become more demanding, liquid cooling is gaining traction, particularly for high-density GPUs that generate significant heat. Direct-to-chip cooling, for example, circulates liquid coolant past heat-generating components to remove heat efficiently. In closed-loop systems, that liquid can be continuously recirculated rather than consumed through evaporation.
Microsoft describes its approach as ‘zero-water evaporation’, highlighting three important distinctions:
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Liquid cooling ≠ zero water consumption.
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Closed-loop cooling ≠ zero site water consumption.
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Zero water consumed for cooling ≠ zero water footprint for the entire facility.
A data centre can therefore use water within its cooling infrastructure without continuously consuming it. Understanding this distinction is essential when evaluating claims of waterless operations.
The Hidden Trade-Off: Saving Water Can Mean Using More Energy
If eliminating water is so attractive, why have data centres traditionally relied on it? The answer lies partly in energy efficiency.
Evaporative cooling is an effective way of removing heat, often requiring less electricity than fully mechanical cooling alternatives. However, the water lost through evaporation must be continuously replaced. Removing evaporation can significantly reduce water consumption, but it may also increase the electricity needed to reject heat. Microsoft itself acknowledges this potential trade-off in its zero-water cooling strategy.
The reverse is equally important. Evaporative cooling may reduce electricity demand while increasing water consumption. This is the water-energy nexus in practice: improving one resource metric can sometimes place greater pressure on another.
For data centres, this creates a challenge when evaluating sustainability performance: A facility might improve its WUE by reducing evaporative cooling, while experiencing a less favourable PUE due to higher electricity requirements.
Neither metric tells the full sustainability story in isolation. The better question is therefore not simply which cooling technology uses the least water, but which cooling strategy delivers the best overall outcome for a particular facility.
What about Data Centres that still rely on water?
While zero-water cooling represents an important advancement, existing water-cooled data centres will continue to operate, and evaporative cooling may remain appropriate in certain climates and operating conditions.
For these facilities, the opportunity lies in improving how efficiently water is used. Cooling towers typically recirculate water multiple times before a portion is discharged as blowdown to control the concentration of dissolved minerals.
Increasing cycles of concentration allows water to circulate more times before discharge, reducing both blowdown and freshwater makeup requirements. However, higher COC also introduces challenges involving scaling, corrosion and biological growth. Without appropriate water treatment and monitoring, these can compromise cooling performance and equipment reliability.
This is where effective water treatment becomes important. By managing water quality, operators can potentially increase COC, reduce discharge and improve the overall efficiency of their cooling systems.
Importantly, water quality also influences heat-transfer performance. Scaling and fouling can reduce cooling efficiency, potentially increasing the energy required to maintain operating conditions. Water management is therefore not just about reducing consumption. It can also influence energy efficiency and operational reliability.
Not Every Litre Has the Same Impact
The sustainability of cooling also depends on geography and water source.
A data centre consuming potable freshwater in a water-stressed region has a different local impact from one using appropriately treated reclaimed water, even if both report similar water consumption. Climate matters too. Evaporative cooling may offer different advantages in a hot, dry environment than in a humid tropical location. Local electricity availability, grid characteristics and water infrastructure further influence the trade-offs.
This creates several possible approaches: eliminating evaporative consumption where appropriate, using alternative water sources where available, or optimising treatment and reuse where water-based cooling remains the better overall choice. Rather than applying one cooling solution everywhere, operators need to evaluate water availability, water quality, energy requirements and operational reliability together.
Beyond Waterless: The Case for Smart- Water Cooling
Zero-water cooling is an important engineering development, particularly where freshwater availability is becoming a constraint on data centre growth. But eliminating water consumption should not automatically be treated as the ultimate sustainability goal.
A cooling system that consumes less water but requires substantially more electricity may introduce a different set of environmental and operational pressures. Equally, a water-based system that uses reclaimed water efficiently may offer advantages that a simple consumption figure cannot capture.
The opportunity is not necessarily to make every data centre waterless, but to make every data centre water-smart: using the right cooling architecture, the right water source and the right treatment strategy for its operating conditions.
Because when it comes to sustainable data centre cooling, zero water is a metric. Optimising the whole system is the goal.
Written by Tvisha Bhanot, Market Development Intern, Hydroleap
About Tvisha: Tvisha is currently pursuing her MSc in Management at Singapore Management University, with professional marketing experience across India and Singapore. Her experience spans brand management, digital marketing, brand communications and consumer insights, with a focus on understanding consumers and supporting brand growth.