However, the broader impact of AI on the water sector goes well beyond cooling technologies used in data centers, the report warns. Data center operations rely on semiconductor chips, the manufacturing of which has major implications on water resources. Not only does it require vast amounts of water but it also generates toxic wastewater, posing additional challenges for water management.

“As semiconductors are the foundation of the AI supply chain, the future water management of their operations will be critical for the water sector,” the report notes.