Ale vs AI: A (Surprising) Look at Water in the Developing West

As the data center industry grows to support everything from cloud-based entertainment to digital emergency services (while providing high-salary jobs and significant economic development), water usage is a common question we get about developments.

Part of the focus on data centers and local water usage stems from the use of evaporative cooling in previous generations of data centers — an approach that is energy efficient but can use a significant amount of local water resources. However, as data centers continue to evolve to minimize impacts in markets where our teams (and customers’ teams) live and work, designs have become quite low water usage while maintaining high levels of resource efficiency thanks to new innovations and a continued focus on sustainable operations.

Of course, how much these campuses use depends on their size, location, the local climate, resource availability, the cooling solution in place and even what workload a given data center is supporting. But one thing has remained consistent and clear: Responsible developers want to do everything in their power to preserve the finite resource of water — and today, many developments have succeeded.

What Makes Today’s Data Centers Water Efficient?

At Stream, we’re proud to say that none of our data centers require routine daily water consumption for IT cooling thanks to closed-loop systems. These systems are filled once, and then that same water inside is constantly recycled and reused, making them a go-to for many sustainable, efficient data center developments.

With closed-loop cooling, a large-scale data center actually consumes less water per square foot than an office building (and often much less than other types of industrial developments — we’ll get to that). In these cases, most of our usage is for standard domestic uses like sinks and toilets.

These major reductions in water used for data center IT cooling can be further supported by other holistic development measures as well. For example, where regulations allow, we can employ water-efficient landscaping strategies like xeriscaping to further reduce water usage. Stream also partners with utilities to support renewable energy sources like wind that do not use water for power generation, further reducing overall water impact. By prioritizing, managing and continuously improving water efficiency, we build data centers that exemplify a new era of both sustainable, efficient operations within communities and resilient, high-performance results for customers.

When we couple being good stewards of the environment with the significant job creation, long-term tax revenue and capital contributions that our developments offer, it makes sense why communities want to attract these developments to their regions. After all, in our digital age, these facilities are as crucial to our economy as highways, bridges and airports. They’re another form of critical infrastructure that’s required to compete in a modern marketplace.

Furthermore, if we contextualize data centers in the wider local and regional landscape, their winning water strategy becomes even clearer. When we look at comparative water use across data centers and other types of developments, the way today’s digital infrastructure stacks up might be surprising.

Let’s look at a real-world example of a growing data center market.

The Big Picture: Putting Water Usage in Context

In Central Arizona, data centers have emerged as a significant economic sector. Despite the economic importance and long-term value of digital infrastructure like data centers, this increase in demand led some residents to be concerned about water utilization. In a dry, often moisture-strapped region like the West, it’s understandable — it also makes it a great place to look if we want to understand how data centers fit into complex markets.

The state’s regional economy was once fueled and sustained by copper, cattle and cotton. However, as our global economy becomes increasingly digital, as Arizona State University’s Kyl Center for Water Policy put it, two new ‘Cs’ now prop up a significant share of this regional landscape: chips (semiconductor chips, not the potato variety) and cloud, as in servers, databases and software. In response, organizations in Arizona have started looking at the numbers.

Arizona State University’s (ASU) recent 2026 paper examines large water uses across economic sectors, placing data center demand in context alongside agriculture, turf and landscaping, power generation and other long-standing urban uses.

Here’s the reality they uncovered:

In Central Arizona, total non-tribal water use has declined by around 9% over the last four decades as urban growth has occurred on previously farmed lands. Why? Agriculture’s share of regional economic contribution has diminished in favor of more urban industries — and urban water uses are generally lower per-acre than agricultural ones.

Even as non-agricultural demand has gradually increased, in Central Arizona, agriculture continues to use more water than any other sector. By comparison to many other large water users, data centers are actually far from the highest annual consumers.

Regarding this chart, the report notes, “In 2024, bottling and beverage facilities used… more than data centers use annually. Why don’t we hear consternation about this use of water? Possibly because a lot of people love craft beer.”

At the facility level, power generation can use a significant amount of water. This said, power generation for all users (not just data centers) in the Arizona market makes up just 3% of the state’s water demand.

That’s roughly the amount of water used on golf courses.

“Data centers have caught a lot of attention over water use. But when we look at how much water data centers actually use in Arizona, we see that the concerns are not borne out. Direct and indirect water use by data centers in Arizona is not significant compared with other industries,” states Sarah Porter, the Director of the Kyl Center for Water Policy. “As we continue to research this topic and provide clarity into the holistic landscape of water use, we hope to assuage the public’s concerns and provide a factual basis for communities to realistically evaluate the tradeoffs and opportunities data centers bring to local and regional economies.”

Ultimately, we can contextualize data centers based on the significance of the work they do just like we can contextualize them based on the resources they use.
Data centers allow you to share files in the cloud, send work emails, watch a show your best friend recommended, help your parents access telehealth options (and even online emergency services) and more. They also continue to ensure we’re competitive in a rapidly changing, digitalizing world, making them a significant national economic asset on a global stage.

How does that measure up against a round of golf? Against a sip of beer? It’ll probably depend on who you ask — but when we look at everything a data center is needed to do in our modern world and how efficiently it can do that, it’s a pretty compelling view into how and why the water is used. Data centers have drawn a lot of attention as their numbers have grown — but the data doesn’t always back the narrative that’s been created, and the work data centers do isn’t always factored in. (After all, without a data center, none of us would even be able to see all the news clips and articles being written about the impacts of data centers. This one included.)

Of course, none of this is to say that the criticality of data centers means that we don’t have a part to play in water conservation. We absolutely do. As part of its responsible development, Stream has always taken its resource efficiency very seriously.

Data Centers That Do Their Part

This continued focus on being a responsible and efficient resource user is why we’re proud to say that water scarcity is one of the factors Stream considers when selecting our sites (long before any shovel meets dirt) and why closed-loop cooling solutions are standard in our design. It’s also why we continue to make our facilities even more efficient despite having very low water use today.

These are all factors and strategies that helped us deliver a win-win-win outcome in Arizona. But even in other markets, we take the same approach to building carefully and with all users and resources in mind.

There is no doubt that the future our people and our planet are inextricably linked to the future of our digital economy, and vice versa. As such, finding a way to support this evolving economy without taxing our shared resources is key. Fortunately, the data center landscape has fundamentally changed. Overall, these campuses are very efficient users and are continuing to become even better. Telling that story is important so people understand the realities of this type of development.

In the end, this is why we’ll never stop working to improve and showcase our stewardship; so that when we greet a community, they can trust we’ll act in the best interest of their people — and their resources.

Insights shared by Amanda Abell, Stream’s VP of Sustainability, on Data Center Knowledge.