Semiconductors and electricity are often cited as the key variables in the global race for artificial intelligence. But as data center expansion accelerates, another resource is moving to the center of industrial strategy: water.
According to the United Nations, nearly half of the world’s population already lives in areas that experience water shortages during parts of the year. As climate change and rising industrial demand place greater pressure on water supplies, water is increasingly becoming a strategic resource in several regions.
Growing water stress across the world
The Middle East and North Africa are widely seen as the regions facing the most severe water scarcity in the world. In these areas, per capita water availability falls far below internationally recognized water-scarcity thresholds, placing sustained pressure on agriculture and urban infrastructure.
India is also confronting rapidly worsening water challenges. Some studies warn that groundwater resources in major Indian cities could decline sharply over the coming decades, as urbanization and industrial expansion drive demand well beyond supply.
Water shortages have also become a major policy issue in the western United States. In states such as California and Arizona, prolonged drought and population growth have led to recurring disputes over water allocation. In this context, water consumption by large industrial facilities, including data centers, has become a subject of growing policy debate.
Across Europe, water stress is also moving higher on the policy agenda. In parts of southern Europe, including Spain and southern Italy, prolonged droughts are affecting both agricultural production and energy generation.
South Korea is not exempt from these pressures. Although the country receives relatively high annual rainfall, its usable water resources are considered lower than the OECD average because of high population density and seasonal imbalances in rainfall. The recurring pattern of heavy summer downpours and winter drought continues to make water management a significant policy issue.
New demand created by AI data centers
Against this backdrop, the expansion of AI data centers has emerged as a new variable. Large-scale data centers require substantial volumes of water for cooling, and some facilities can consume millions of liters per day.
Water use by data centers, alongside their electricity consumption, is increasingly becoming a focal point in industrial policy debates. In regions already experiencing water stress, the siting of data centers can trigger local tensions and community opposition.
A new strategic resource in industrial competition
The core issue extends beyond data centers themselves. It lies in the broader relationship between industry and water resources. Semiconductor fabrication plants, chemical facilities and power stations all require significant volumes of water. AI infrastructure, therefore, adds a new layer of demand on top of existing industrial water consumption.
As technological competition intensifies, industries require ever greater amounts of energy and natural resources. With the rapid growth of the AI sector, water scarcity is evolving from an environmental concern into a broader issue of economic and industrial strategy.
Ultimately, competition over AI infrastructure may be shaped by four key resources: electricity, semiconductors, data and water.
