This report spotlights data centers’ biggest and least visible water use: the power that runs them. While data center companies typically focus on the amount of water they use to cool the technology running within their facilities, the water used for power generation to meet their massive energy needs has an even greater impact.

The report examines this largely overlooked water demand across seven states that together host about half of all U.S. data centers—Virginia, Texas, California, Illinois, Georgia, Ohio, and Arizona. In these states, water-intensive generation supplies much of the grid—and many of the plants supplying that power are in regions facing water stress or drought.

Key findings: Power generation makes up the bulk of the data center water use. Data centers in the states analyzed depend on about 3.4 trillion gallons of freshwater annually for electricity, around 12 times the annual water use of Los Angeles, Phoenix, and Washington D.C., combined. 78% of the electricity came from power plants that use water to operate. 66% of those plants were exposed to medium-high to extremely high water stress.

Most power producers identify data centers as a primary driver of rising electricity demand, but few have considered the water risks. Most data center operators do not account for these risks. As AI accelerates the buildout, the report highlights steps for producers, operators, policymakers, and investors to address these risks.