The Gulf region is locked in a multitrillion-dollar pursuit to build global leadership in AI. Yet this ambition faces a formidable obstacle—access to water. Data centers supporting AI in Saudi Arabia, the UAE, and neighboring countries are guzzling massive volumes of water.
The region is projected to need roughly 426 billion liters each year by 2030—turning water shortages into a serious limitation for tech growth. The UAE alone is expected to consume roughly 61 billion liters each year.
According to the World Resources Institute, Qatar, the UAE, and Saudi Arabia are ranked among the most water-stressed nations globally. Daily water use per person here exceeds 500 liters, triple the average in Europe.
Earlier this year, during a regional mission led by the U.S. president, Gulf leaders announced more than $2 trillion in deals to accelerate tech-driven economic transformation.
The UAE has launched a 1gigawatt AI campus called Stargate, supported by G42 and OpenAI. In Saudi Arabia, there are plans to build data centers with 2,200 megawatts of capacity. This expansion has attracted major names like Microsoft, Google, and Amazon to form regional hubs.
Although the inflow of investment positions the Gulf as a digital crossroads linking Asia, Europe, and Africa, the soaring water usage linked to these facilities may jeopardize environmental goals. The growing need for water in AI data centers may force policymakers to choose between meeting climate pledges and executing technology growth plans.
Currently, data centers in the Middle East and Africa use about 119 billion liters annually. A single 1megawatt data center can consume up to 25.5 million liters per year, which is the daily equivalent demand of a city of 300,000 people.
The Gulf’s intense summer heat exacerbates the problem, sending data centers toward evaporative cooling systems. For example, OpenAI’s GPT3 model uses approximately 500 ml of water per 10 to 50 generated responses based on academic findings.
Much of the Gulf region depends on desalinated seawater, which is energy-intensive. Saudi Arabia runs two of the world’s biggest desalination plants, producing over a million cubic meters a day. However, powering them requires a huge amount of fuel, often fossil-based.
Some companies are testing alternative cooling tactics, though results are early and not widespread. UAE’s Khazna Data Center is trying to treat sewageeffluent water for cooling. International firms like Equinix use geothermal systems or lake water in other locations to reduce water usage. Other options include recycling water in closed-loop setups or using air-cooled systems instead of evaporation methods.
Major cloud providers have made strong climate pledges: Google aims to run entirely on carbon-free power by 2030, while Microsoft plans to become carbon negative. However, implementation in Gulf operations has been spotty. Only about 25% of Gulf-based companies monitor water usage metrics, despite nearly 90% increasing sustainability investments since Covid-19, according to Knight Frank.
Despite these headwinds, governments are pressing forward. Recently, Kuwait joined a $100 billion collaboration on AI infrastructure with Microsoft and MGX. Qatar, hosting Microsoft Azure and Google Cloud, is investigating solar-powered floating platforms to integrate water and energy systems. Bahrain and Oman continue investing in digital networks despite heavily depending on groundwater, which is non-renewable.
Analysts warn that without significant investments in alternative cooling technologies and upgrades to water systems, demand could exceed supply well before the decade ends. Regional energy networks will also come under pressure. According to the International Energy Agency projects, Gulf countries may have to double their energy generation capacity to support AI infrastructure alongside increased desalination.
Investors are paying attention, with ESG-driven funds now often requesting detailed water use disclosures before funding Gulf tech projects. In response, Gulf governments and tech firms are fast-tracking research into atmospheric water harvesting and advanced heat pumps, though costs remain high.
AI industry actors, such as D-Wave Quantum Inc. (NYSE: QBTS), have a major challenge on their hands; how to ensure their innovations can operate efficiently without requiring huge amounts of water to cool the system. Addressing this issue will position companies well in lucrative markets like the Gulf countries.
NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS
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