Samer Choucair: Water Scarcity Becomes a Critical Factor in Valuing Data Center Investments
Investment strategist Samer Choucair said that the rapid expansion of artificial intelligence is pushing data centers toward record levels of water consumption, both directly through cooling and indirectly through electricity generation. He explained that United Nations researchers estimated in June 2026 that data centers worldwide consumed approximately 4.5 trillion liters of water in the previous year, with consumption expected to double to 9.3 trillion liters by 2030.
Choucair noted that direct water consumption reached approximately 560 billion liters in 2025, while data centers consumed 448 terawatt-hours of electricity during the previous year—more than the entire electricity consumption of Saudi Arabia. Electricity demand from data centers is expected to double by 2030. He added that AI currently accounts for roughly one-fifth of data center electricity consumption, a share that could rise to 40% in the coming years.
Water Becomes an Investment Decision Factor
Samer Choucair explained that traditional evaporative cooling systems rely heavily on freshwater, while indirect water consumption associated with electricity generation represents the largest portion of the water footprint in many cases.
He noted that new facilities in the United States could require hundreds of millions of gallons of water per day by 2030, at a time when many projects are being developed in areas already experiencing water stress. This could lead to higher costs and permitting delays.
Choucair said that India, the western United States, and the Gulf countries face a similar challenge. He pointed out that data center water consumption in Saudi Arabia could rise from approximately 20 billion liters in 2025 to more than 87 billion liters by 2030, representing a compound annual growth rate of more than 30%. Water consumption across the Gulf Cooperation Council countries could reach hundreds of billions of liters annually by the end of the decade.
Desalination Creates an Investment Opportunity
Samer Choucair noted that Saudi Arabia and the UAE rely heavily on desalination. Although both countries have made substantial investments in desalination capacity, this dependence increases the energy costs associated with water and adds pressure to budgets and industrial water prices.
However, he argued that integrating data centers with desalination plants and utilizing waste heat could turn part of the challenge into an investment opportunity.
Choucair added that Google, Microsoft, and Amazon have announced targets to achieve “water positive” operations by 2030 through replenishment and water reuse. However, the accelerating expansion of AI makes achieving those targets more difficult in the short term.
Redirecting Institutional Capital
Samer Choucair emphasized that sovereign wealth funds and asset managers have begun incorporating water risks into their governance frameworks and reassessing data center projects located in areas of high water stress.
He explained that capital allocation is no longer based solely on energy and computing returns. It must also account for the cost of capital arising from regulatory and social water risks.
According to Choucair, the most significant opportunities include:
Direct liquid cooling
Immersion cooling
Closed-loop and near-zero-water-consumption systems
Advanced desalination
Industrial water management
Public-private financing of water infrastructure linked to data centers
Saudi Arabia and Vision 2030
Samer Choucair said that Vision 2030 places the digital economy and artificial intelligence at the center of Saudi Arabia’s diversification strategy, alongside the development of data centers and cloud computing supported by the Public Investment Fund and initiatives such as HUMAIN.
However, he stressed that water scarcity remains a structural constraint.
Choucair noted that integrating data centers with desalination facilities and renewable energy could reduce their net water footprint and improve project economics. He emphasized that achieving this model requires directing capital toward water-efficient designs from the planning stage, while encouraging water reuse and the use of non-traditional water sources.
He concluded that advanced cooling technologies, water recycling, desalination, and environmental and engineering consulting will create opportunities for infrastructure funds and private equity investors.
At the same time, the risks include tighter regulations, higher operating costs, project delays, community opposition, and fluctuations in industrial water prices.
Samer Choucair emphasized that water scarcity has become a material variable in the return-and-risk equation, and that intelligent capital allocation will increasingly distinguish between data center projects capable of achieving sustainable growth and those vulnerable to resource constraints.