Arizona faces severe water shortages from the drying Colorado River and depleting aquifers, yet tech companies continue building data centers and chip factories. Facilities like those from Microsoft, Meta, and TSMC have expanded rapidly, raising concerns about water use. However, current data shows their impact on the state's water supply remains limited.
Arizona's water woes are well-known, with the Colorado River shrinking due to climate change and groundwater aquifers diminishing. Farmers have removed cotton and alfalfa fields, and some housing developments have been halted. Despite this, the state has seen a surge in tech infrastructure over the past year. Hyperscaler companies such as Microsoft and Meta are constructing data centers to support the artificial intelligence boom, while Taiwan Semiconductor Manufacturing Company (TSMC) invests billions in a factory complex near Phoenix.
Arizona now hosts more than 150 data centers, each housing thousands of servers requiring cooling in the desert heat. Cooling methods include air conditioners, water pipes, or evaporative mists, which can consume significant water. Estimates vary, with an average data center using 50,000 to 5 million gallons daily. A Ceres analysis found Phoenix data centers used about 385 million gallons annually last summer, potentially rising to 3.8 billion gallons—a figure equating to roughly 1 percent of local residential use and under 0.5 percent of total 2024 consumption. Agriculture, by contrast, accounts for over 70 percent of the state's water.
Industrial water use in the Phoenix metro area has stayed flat in recent years, with major users including golf courses, power plants, and mines. In Mesa, where Apple and Meta operate data centers, industrial usage was 6 percent of potable water in 2024. Companies emphasize efficiency: A Microsoft spokesperson noted their Arizona water-cooled centers consume water only above 85 degrees Fahrenheit and future builds will use zero-water systems. Meta employs zero-water cooling based on local conditions, and Amazon states it uses water only when necessary.
TSMC's $165 billion gigafab requires water equivalent to 10,000 homes but plans to recycle 90 percent via reclamation plants. Non-residential use in Phoenix is 24 percent of total consumption, up just 2 percent since 2021. Critics like Ceres' Kristen James highlight indirect impacts from power generation, estimating it could quadruple to 14.5 billion gallons yearly.
Local responses vary. Buckeye's mayor Eric Orsborn said data center development there was uncontroversial, with power now the main challenge. Cities like Mesa and Phoenix cap industrial usage and require supplemental supplies; Mesa gained 7,800 acre-feet from large users. Sarah Porter of Arizona State University observed, “There’s not a hair-on-fire context right now.” Regulations ensure municipalities plan water for the next century, though experts warn of opportunity costs for future development.
