A warm-water closed-loop cooling system could substantially reduce on-site water demands in data centers, according to Nvidia. However, experts caution that water consumption in energy generation and chip manufacturing may offset these gains.

Nvidia unveiled a warm-water cooling system designed to significantly reduce data center water use by effectively eliminating almost all water consumption within the facility itself. The system operates in closed loops: cooling fluid is filled once and recycled throughout the life of the facility, requiring no additional water to cool the chips. Under favorable climatic conditions, this could achieve a 100% reduction in on-site water use. The exact impact depends on specific configurations and conditions, though Nvidia believes the approach could meaningfully reduce internal water consumption.

However, while the system addresses on-site water use, it does not account for water consumption in external supply chains—particularly in power generation and chip manufacturing. These external factors could substantially affect the overall water footprint of data centers if energy balance and production processes are not considered.

The water demands of energy production are substantial. According to the U.S. Geological Survey, fossil fuels account for roughly 2.7 billion gallons per day of water use in the United States, primarily for evaporative cooling. Water consumption for electricity generation reaches approximately 1.17 liters per kilowatt-hour from natural gas and 2.2 liters per kilowatt-hour from coal. The International Energy Agency reports that fuel and power-generation facilities supply roughly half of all electricity for data centers.

Hydroelectric plants account for about 10% of data center electricity, though reservoir evaporation amounts to approximately 6.8 liters per kilowatt-hour. Geothermal sources vary in water use by technology, with some startups focusing on degraded water that is typically unused. Wind and solar installations consume relatively small amounts—approximately 0.01 to 0.03 liters per kilowatt-hour when accounting for production and panel cleaning.

The IEA forecasts that by 2030, more than 40% of new electricity for data centers will come from natural gas and coal. Without radical changes in energy sourcing, the water footprint of data centers will remain substantial regardless of advances in internal cooling technologies.

Nvidia's warm-water cooling will reduce on-site water consumption, but achieving significant reductions in the global water footprint of data centers requires systemic changes in energy sourcing and chip manufacturing. Technical innovation represents only one component of a larger solution.