The rapid global expansion of artificial intelligence is set to drive a 129% surge in water demand across the AI value chain by 2050, according to new research from Xylem and Global Water Intelligence (GWI).
Managing the Impacts of the AI Revolution provides the most comprehensive assessment to date of how AI is reshaping global water use. The report also outlines practical strategies to meet that demand while strengthening water security for communities.
Spending on AI is forecast to approach $2 trillion in 2026, accelerating infrastructure build-out worldwide. By mid-century, the expansion is expected to add 30 trillion liters of water demand annually, driven primarily by power generation (~54%), semiconductor fabrication (~42%), and data center growth (~4%).
Crucially, the report emphasizes that increased AI water use does not have to pit industry against communities. Global water systems currently process roughly 320 trillion liters of wastewater annually and lose an estimated 100 trillion liters through aging infrastructure—volumes that, if recovered, could offset AI’s projected demand and reduce stress on freshwater resources.
The report calls for a coordinated “water transition” built on reuse, digital infrastructure, and cross-sector partnerships to ensure water is a resilient foundation for economic growth, not a constraint on innovation.
“AI is placing new demands on water supplies, but many of the tools needed to address the challenge already exist,” said Matthew Pine, Xylem’s president and CEO.
“Advanced treatment technologies, for example, allow us to recycle water rather than waste it. Digital systems can help better manage supply in real time, reducing water lost to leaks. It's time for a water transition built on targeted investment and collaboration between industry, utilities, and governments to ensure water systems can support both growth and community resilience.”
The analysis also flags growing geographic risks: nearly 40% of data centers are already in regions experiencing high water stress, and future growth is expected to concentrate in similarly constrained watersheds. Localized, basin-level solutions will be critical even as global efficiency gains create room for growth.
“Our projections examine water use across the full AI value chain—from chip fabrication and data center operations to indirect demand from power generation—and assess how technology choices shape future demand,” said Christopher Gasson, CEO of Global Water Intelligence.
“The greatest pressure points emerge in semiconductor manufacturing and in fast-growing data center hubs in the United States, East Asia, and South Asia. In these regions, expanded wastewater reuse, leakage reduction, and targeted infrastructure investment can fully offset future growth.”
The report highlights early success stories of collaboration. In Mexico, utilities in Mexico City and Monterrey teamed with Amazon and Xylem on smart pipeline upgrades to reduce leaks. Sensors and advanced analytics are projected to save more than 1.3 billion liters of water a year while improving supply reliability for residents.
