written by Josh Weinberg, Senior Policy Advisor, AGWA and Georgette Mrakadeh-Keane, Communications Lead, AGWA (Alliance for Global Water Adaptation, 19 Mar 2026) in partnership with AWP
Advancement of computing and artificial intelligence is having transformative impacts on how people live, work and interact across societies. We are witnessing a rapid acceleration of technological solutions and scientific discovery as a result. It is also bringing forth the rise of a new industry and infrastructure for data centers.
Global capital expenditure to build, upgrade and operate data centers — covering the construction, land costs, cooling and power generation — is projected to reach 2-3 trillion USD over the next five years. The investment in the chips and hardware inside the data centers is even greater, with projections reaching 4 trillion USD over the same period.
The pace of growth can present a challenge where development timelines are outrunning the systems designed to manage them.
One of the fastest growing regions for the development of this infrastructure is found in Asia-Pacific, where experts have estimated that between 800 billion and 1 trillion USD will be invested to build digital infrastructure in the next few years (with about half of this taking place in China and Taiwan).
Data centers require land, materials and electricity to operate. They can also require water directly for cooling and indirectly in the generation of the electricity they use — particularly if it depends on thermoelectric power plants commonly used for nuclear, coal, natural gas or for hydropower. The key challenge is to ensure that the infrastructure built today is optimized to ensure that its water and energy use do not create increased risks for shortages, higher costs of services or environmental harm in the regions where they are built.
Water resilience is a crucial part of the equation for the sustainable development of digital infrastructure.
Any operation dependent on water for cooling will face major operational risk if access to the required water is lost at any period of time. Even if direct access to water for cooling is maintained, negative impacts to local water sources and services for residents that emerge in areas with data centers can create reputational risks, loss of social license to operate and impede future opportunities.
In the Asia-Pacific region, most of the areas with the greatest development of data centers — from Jakarta in Indonesia to Johor in Malaysia or Delhi, Chennai and Bengaluru in India — are located near large population centers where water resources are scarce and under pressure. Those same regions also feature energy grids that are currently dominated by coal and natural gas, with relatively large water demands. Malaysia’s rapid growth in the data center market in Southeast Asia has been forced to respond to water impacts by creating stronger regulations and incentives to reduce water use. In drought-prone tech hubs like Chennai and Bengaluru, operators are facing severe delays in securing “Consent to Establish” permits from local pollution control boards, as civic groups increasingly highlight the conflict between massive hyperscale water footprints and the rolling municipal water shortages faced by residents.
Read the whole article here, including considerations of the various players and pressures involved >
This series is part of a collaboration between the Australian Water Partnership and the Alliance for Global Water Adaptation.