Nvidia just announced a warm-water cooling system that it says can dramatically reduce the amount of water a data center uses — eliminating “pretty much all water usage” inside the data center, according to an Nvidia executive in a press release.  

“The water consumption challenge for data centers is largely solved,” Josh Parker, chief sustainability officer at Nvidia, recently told Axios.

But that’s only part of the water story. As long as AI data centers run on fossil fuels — a choice tech companies are increasingly making — the savings stop at the data center’s walls.

The core issue is how Nvidia measures data center water use. According to its blog post, the company essentially draws a line around the data center. Anything inside gets counted, and anything outside gets ignored.

To be fair, Nvidia’s system does appear to deliver on its facility-level promise — the coolant runs in a closed loop, filled once and recirculated for the life of the facility, meaning no new water is consumed to cool the chips. In favorable climates, the company says, that can amount to a 100% reduction in on-site water use.

TechCrunch has asked Nvidia to clarify the matter, and we’ll update this article if we receive a reply.

The problem is, water use outside of the data center — primarily in electricity generation and chip manufacturing — can double or triple the total water footprint of a facility. That means Nvidia’s solution addresses about a quarter to a third of AI data centers’ total water consumption. 

The new system is clever, pumping coolant into racks at 45°C (113°F). That’s hot for humans but not for computer chips. After passing through a server, the coolant emerges at 55°C (131°F), Nvidia said, bringing a significant amount of heat away from the hardware. 

At that temperature, the outside air in most climates can draw heat off passive radiators without evaporative cooling or, in some cases, fans. A data center without fans or chillers would not only use less water, but it would also be more efficient and quieter. 

But no data center can operate without an electricity supply, and many types of power plants are themselves major water consumers.

Fossil fuel power plants are one of the largest water users in the U.S., consuming 2.7 billion gallons per day, according to the U.S. Geological Survey — most of it for evaporative cooling. Natural gas power plants use 1.17 liters of water for every kilowatt-hour of electricity they generate, according to a recent study. Coal plants are even more water-intensive, using 2.2 liters per kilowatt-hour. Fossil fuel power plants collectively generate about half of all data center power today, according to the IEA.

Hydropower dams, which supply around 10% of data center power, don’t consume water in the same direct way, but evaporation from their reservoirs amounts to 6.8 liters lost per kilowatt-hour generated. Geothermal, a source that tech companies are starting to explore, varies widely — it can be higher or lower depending on the specific technology. Some enhanced geothermal startups, like Fervo, have pledged to use mostly “degraded” water that would otherwise go unused.

Wind and solar power, on the other hand, use vanishingly small amounts of water, about 0.01 liters and 0.03 liters per kilowatt-hour, respectively — figures that include the water needed for manufacturing and cleaning solar panels. 

While renewables are providing a growing share of new electricity capacity, natural gas and coal are expected to provide more than 40% of new electricity needed to meet data center demand through 2030, the IEA projects. Without major changes to that trajectory, data centers will still consume large amounts of water, regardless of what Nvidia does inside its walls.