As concerns grow over artificial intelligence’s environmental impact, Tesla Inc. (NASDAQ:TSLA) and Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk backed Nvidia Corp’s (NASDAQ:NVDA) argument that data centers consume a surprisingly small share of America’s water supply.
Nvidia Pushes Back On AI Water Consumption Concerns
On Monday, in a post on X, Nvidia highlighted findings from the Manhattan Institute showing that data centers account for just 0.2% of daily water usage in the U.S., while arguing that advances in cooling technology are dramatically reducing the industry’s water footprint.
The chipmaker said newer AI facilities are increasingly adopting liquid-cooling systems that can significantly reduce or even eliminate the need for water-intensive cooling towers.
Musk shared Nvidia’s post on X and responded with a one-word endorsement: “True.”
According to Nvidia, AI facilities using 45-degree Celsius liquid cooling can rely on dry coolers rather than traditional cooling-tower systems.
This reduces cooling-related water consumption from roughly 2.6 million gallons per megawatt annually to near zero in favorable climates.
Rubin AI Systems Aim To Eliminate Cooling Water Use
In a blog post published Sunday, Nvidia said its upcoming Rubin-generation AI infrastructure will be the company’s first platform to use fully liquid-cooled architecture.
“The NVIDIA DSX reference design for AI factories has zero water consumption,” said Ali Heydari, Nvidia’s director of data center cooling and infrastructure.
Heydari added that dry-cooler-based systems operate as closed loops with “pretty much all water usage” eliminated except in limited circumstances.
Nvidia said the design also reduces energy demand by capturing heat directly at the chip level, avoiding the need to cool large volumes of air. Historically, cooling has represented as much as 40% of a data center’s electricity consumption.
Water Emerges As AI’s Next Infrastructure Challenge
The discussion comes as investors and policymakers increasingly scrutinize the resources required to support AI expansion.
Amazon.com, Inc. (NASDAQ:AMZN) this week disclosed that its data centers consumed approximately 2.5 billion gallons of water in 2025. However, the company said its water usage efficiency was substantially better than industry averages.
Meanwhile, local opposition to new data centers has intensified across the U.S., with critics citing concerns ranging from water availability and energy demand to noise and infrastructure strain.
Price Action: Shares of NVDA closed Monday at $208.65, down 0.97% and slipped another 0.41% to $207.79 in after-hours trading, according to Benzinga Pro.
According to Benzinga Edge Stock Rankings, Nvidia ranks in the 98th percentile for Growth, supported by strong price performance in medium and long-term time frames but a negative price trend in the short term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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