How The AI Economy Is Reshaping Water—And What Utilities Can Do About It

Watering the New Economy reveals a critical but often overlooked reality: the rapid expansion of AI, data centers, semiconductor fabs, and power systems is accelerating water demand. at a pace that existing infrastructure cannot support. Today, the AI value chain uses 23.7 km³ of water annually, and demand is projected to grow 129% by 2050. As this shift unfolds, utilities must navigate rising withdrawals, aging infrastructure, and intensifying weather extremes—all while maintaining reliability and affordability for their communities. Yet the paper makes clear that this is not a zero-sum contest between innovation and public needs. Global systems generate 310 km³ of wastewater each year, and 100 km³ is lost through aging networks—resources that could substantially offset new demand. With the right strategies—reuse, smarter networks, and more efficient energy and industrial processes—utilities can strengthen resilience and unlock new supply without increasing freshwater withdrawals.

The report underscores that cities and the new economy share the same vulnerabilities: drought risk, infrastructure fragility, and rising expectations for sustainability. It also highlights how leading technology and manufacturing companies are ready to invest in water security because their operations depend on it. For utilities, this is a unique opportunity to build cross sector‑ partnerships that expand reuse, accelerate leak reduction, and modernize networks with intelligent digital tools. These actions not only protect communities but also ensure that economic growth is not constrained by water scarcity. The message is clear: collaboration can transform water from a limiting factor into an engine of sustainable progress.

What utilities will gain from this paper:

• A clear, fact-based understanding of how AI, data centers, and semiconductor fabs are driving 129% growth in water demand by 2050—and what that means for local systems.
• Insight into why water stress, not total water volume, poses the greatest risk to both communities and advanced industries.
• Examples of how companies like Amazon and Intel are partnering with utilities to fund leak reduction, modernize infrastructure, and expand reuse capacity.
• Guidance on the three highest impact levers utilities can pull—network efficiency, reuse, and renewable aligned energy planning—to maintain withdrawals at today’s levels even as demand grows.
• A roadmap for building a “Water Transition” that aligns economic growth with water security through data, digital tools, and cross sector investment.