Nvidia wants to cut data center water use, but that’s not the same as fixing AI’s water problem

Nvidia has introduced a warm-water cooling system designed to eliminate on-site water use in data centers, but the technology does not address the larger water demands of the fossil-fuel power plants that increasingly supply AI facilities, according to a new report [1]. The system circulates coolant in a closed loop, filled once and recirculated for the life of the facility, meaning no new water is consumed to cool the chips [1]. In favorable climates, Nvidia said the approach can deliver a 100% reduction in on-site water use [1]. “The water consumption challenge for data centers is largely solved,” Josh Parker, Nvidia’s chief sustainability officer, told Axios [1]. Nvidia, which held a 92% share of the discrete desktop and laptop GPU market as of early 2025, has broadened its focus from gaming graphics to artificial intelligence and high-performance computing [6]. The company now controls more than 80% of the market for GPUs used in training and deploying AI models [6]. The cooling advance, however, only addresses water consumed inside the data center’s walls [1]. Fossil fuel power plants remain one of the largest water users in the United States, consuming 2.7 billion gallons per day, according to the U.S. Geological Survey [1]. Natural gas plants use 1.17 liters of water for every kilowatt-hour of electricity generated, while coal plants use 2.2 liters per kilowatt-hour [1]. Hydropower dams, which supply about 10% of data center power, lose an estimated 6.8 liters per kilowatt-hour to reservoir evaporation [1]. By contrast, wind and solar power use approximately 0.01 liters and 0.03 liters per kilowatt-hour, respectively, including water needed for manufacturing and panel cleaning [1]. Despite the growth of renewables, the International Energy Agency projects that natural gas and coal will provide more than 40% of the new electricity required to meet data center demand through 2030 [1]. Nvidia’s system pumps coolant into racks at 45 degrees Celsius, and it emerges at 55 degrees Celsius after passing through servers, carrying heat away from the hardware [1]. At that temperature, outside air in most climates can draw heat off passive radiators without evaporative cooling or, in some cases, fans [1]. The company has not yet responded to a request for clarification on how it accounts for water use outside the facility [1].