It’s no secret that Arizona is worried about its water. The Colorado River is drying up, in part due to climate change, and groundwater aquifers are running dry. Some of the state’s biggest industries are suffering as a result: Many farmers have been forced to rip up their cotton and alfalfa fields, and some home developers have been blocked from building new subdivisions.
A state with hydrologic woes of this magnitude would seem an unlikely place to attract new factory-scale industries, which often have substantial water appetites themselves, but over the past year that’s exactly what’s happened. So-called hyperscaler tech companies like Microsoft and Meta have swarmed in to build the data centers fuelling the artificial-intelligence boom, and the Taiwan Semiconductor Manufacturing Company has spent billions of dollars on a factory complex outside Phoenix. This rapid development has triggered fears that the industry will suck up the finite water supplies available to residents of Phoenix and Tucson.
So far, however, these predictions have not come true. Even though Arizona will soon be home to nearly 200 data centers and chip factories, these facilities have not yet caused a major bump in the state’s water consumption. The companies’ precise effects on water supply are hard to discern due to their own secrecy about their water usage, but the aggregate picture suggests they have found ways to minimize their impact, whether through new cooling technologies or by recycling water on-site. And despite local backlash, water experts and many local officials appear to have largely made their peace with the industry’s arrival — and with the Phoenix region’s emergence as one of the nation’s largest AI infrastructure clusters…