Arizona’s booming data center industry powers everything from artificial intelligence to streaming video and cloud storage, and its rapid expansion has helped solidify Arizona as a national hub for the digital economy. But a new analysis from Ceres — a nonprofit advancing business leadership on innovative solutions to address the world’s most pressing sustainability issues — highlights a far less visible reality: the water demands tied to this growth are larger, and much riskier, than most companies or policymakers have acknowledged.

For years, the discussion around data centers and water has focused on the facilities’ use of water for cooling. That use is important, but it’s only part of the picture. Ceres’ report, published in September 2025, shows that when you account for the water required to generate the massive amounts of electricity these facilities consume — as well as the cumulative impacts of multiple centers clustered in the same region — the water usage becomes dramatically larger.Data center developers seek easy access to transmission lines, fiber optic lines and energy infrastructure, which contributes to the clustering........

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