Liquid cooled servers in an installation at the Global Switch Docklands data centre campus in London, UK, on Monday, June 16, 2025. Bloomberg | Bloomberg | Getty Images
Europe's ambitious artificial intelligence strategy is at risk of colliding with an often overlooked but critically important environmental issue: water scarcity. The European Union has big plans for data center expansion, announcing in April that it intends to at least triple its capacity over the next five to seven years as part of a push to become a world-class AI hub. The rapid rollout of data centers, which power all aspects of the digital economy, from social media and online banking to AI tools like ChatGPT, has sparked some concern — particularly in regions already facing water scarcity. The issue is especially acute across southern Europe, with around 30% of the population known to be situated in areas with permanent water stress. This refers to a situation where the demand for water exceeds the available supply during a specific period. Data centers typically require large quantities of water to keep them from overheating. Major tech companies like Amazon , Microsoft and Meta have invested billions of U.S. dollars in new facilities in Spain, for instance, while Google has plans to develop three hubs in Greece's Attica region.
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Kevin Grecksch, associate professor of water science, policy and management at the U.K.'s University of Oxford, told CNBC that plans to build data centers in water-stressed areas across Europe reflects a lack of integrated thinking from policymakers. "AI is a buzzword and the talk of the town," Grecksch said. "So, national and regional politicians try to get their hands on it, and it sounds as if you're investing into the future, creating a few new jobs — but sustainability seems to be an afterthought." Grecksch said the rapid rollout of data centers across the region throws up plenty of unanswered questions, such as, given that in most jurisdictions public water supply has priority over everything else, what happens if data centers are shut down in a drought scenario? He conceded he had no answer to this prospect. "Data centres tend to be built in arid or semi-arid climates because that's the preferred environment for servers; yet those areas tend to be subject to water scarcity or drought prone as well," Grecksch said.
A spokesperson for the European Commission, the EU's executive arm, said policies of the European High Performance Computing Joint Initiative (EuroHPC JU) include selecting hosting sites for AI factories based on criteria that prioritizes energy efficiency and environmental sustainability. "Green computing will continue to be pursued through energy-efficient supercomputers optimised for AI, using techniques such as dynamic power saving and re-use techniques like advanced cooling and recycling of the heat produced," the spokesperson told CNBC by email. The EU referenced the new "JUPITER" supercomputer in Jülich, Germany, as "a prime example of European excellence" in addressing energy efficiency, saying the system runs entirely on renewable energy and features "cutting-edge" cooling and energy reuse.
Data centers' water footprint
In Aragon, an area of severe water stress in northeastern Spain, Amazon is planning to open three data centers. The proposal, which the U.S. tech giant says will create thousands of jobs, has sparked tension between local farmers and environmental activists. In the U.K., the small English village of Culham has been picked as the first of the British government's so-called AI "growth zones." The designation of the Oxfordshire site, which is situated close to one of the country's first new reservoirs in 30 years, has raised fears that it could put further pressure on local water supplies. Nick Kraft, senior analyst at political risk consultancy Eurasia Group, said "extremely arid" and high-water stress localities were being targeted across Europe for further data center development. "Complicating the matter is the fact that the most common understanding of data center water usage, and typically what companies report on when communicating with local stakeholders, is on-site water use — or the water used for cooling in data centers," Kraft told CNBC by email.
This photograph taken on August 24, 2025 shows a general view of the Mediano reservoir, in the northeastern region of Aragon, Huesca province. Ander Gillenea | Afp | Getty Images
"This despite more than half of data centers' water footprint being off-site, occurring in energy generation and semiconductor manufacturing," he added. There are emerging signs that data center operators are maturing in their water stewardship, Kraft said, but assessing the full water footprint of these projects is expected to remain a major challenge. Analysis published by S&P Global last month said the data center industry's average exposure to water stress is projected to be high in the 2020s, with southern European countries such as Spain and Greece among the locations forecast to face the most water stress.
Data centers power the digital economy
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