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‘AI revolution could exacerbate global water scarcity’, report warns

Australia’s data centres are expected to double in value by 2030; however, a new study has found that this economic growth is coming at the cost of water security, with experts warning the rise of AI and digital technologies could exacerbate this global concern.

user icon Bethany Alvaro Wed, 31 Dec 2025
‘AI revolution could exacerbate global water scarcity’, report warns

A new Waterwise and BSI report analysed and compared global data centre capacity with water security levels, finding that data centres are one of the top 10 commercial consumers of water globally.

The report found that just a single 1MW data facility uses over 25 million liters of water each year for cooling purposes, the equivalent of supplying 400 people with drinking water for a year.

“Data centres are critical to digital life and taking advantage of the opportunity presented by AI in particular. But their growth must not come at the expense of water security,” said Murray Sayce, head of sustainability solutions at BSI.

 
 

“Technology is becoming ever more central to our lives, so now is the moment for international collaboration to embed sustainable practices into data centre development and operation.”

Australia, one of the nine countries included in the study, received a score of 39 out of 85, indicating a “medium-average” water insecurity level with moderate progress towards active solutions.

Despite this, Australia’s data centre sector is set to boom within the next decade, with an estimated value of nearly $5 billion by 2030.

Australia has seen a rapid adoption of AI in particular over the past two years, with recent government initiatives like the National AI Plan and industry investments including OpenAI’s first Sydney office, pointing towards growth in the sector.

Waterwise CEO Nicci Russell warned of the rise of AI reliance, saying there needs to be more safeguards and initiatives in place to support digital development while keeping critical environmental assets safe and available.

“Nothing happens without water. This report by BSI underscores the urgent need for governments and industry to integrate water efficiency into data centre planning,” Russell said.

“Collaboration between government departments, regulators and industry stakeholders is essential to model water needs, mitigate risks and ensure that the vital growth of the data centre sector aligns with global water security goals.

“Without action, the AI revolution could exacerbate global water scarcity.”

The United States, Japan, India, and China were among the countries deemed most at risk of water insecurity, with little actionable and progressive water security policies in place.

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