Posted on 07/12/2026 9:24:17 AM PDT by PROCON
The digital economy runs on data centers, a vital core of modern infrastructure most people never see. But there’s a debate brewing about data centers, with plenty of misinformation aimed at slowing data center development and, in some cases, halting it altogether. The Goldwater Institute has put together the following Free-Market Guide to Data Center Infrastructure to dispel some of the data center misconceptions.
Is it just “Big Tech” that needs data centers? What is really driving their growth?
No, it’s not just about “Big Tech.” Data centers are the 21st-century version of a power plant or water tower, providing the essential “digital flow” for every sector of the modern economy.
Hospitals rely on data centers for real-time access to electronic health records; banks use them to process millions of secure transactions per second; and manufacturing plants deploy them to power smart assembly lines. Every time you back up a photo, use GPS, stream a show, or when a student accesses an online portal for homework, a data center is involved.
Since every digital action requires a physical home, data centers need immense scale to support the global economy. What looks like an oversized warehouse is a highly engineered environment housing tens of thousands of servers operating with near-zero downtime. This necessitates specialized cooling, high-capacity fiber, and massive on-site power distribution. By building on large campuses, developers can grow in phases to meet the skyrocketing demand for AI and cloud computing while maintaining a predictable, high-value footprint.
Are data centers “resource hogs” that will drain local water supplies?
No, this claim is outdated and ignores modern technological innovation.
Data centers are among the most water-efficient industrial facilities ever built. Nationwide, data centers consume less than 0.05 percent of total U.S. freshwater withdrawals, a tiny fraction compared to agriculture, thermoelectric power generation, and manufacturing. Furthermore..
(Excerpt) Read more at goldwaterinstitute.org ...
Traditional public utility grids cannot supply the city-sized power loads (often 1 GW or more) that hyperscale AI demands in a reasonable timeframe.
The Power Systems They Are Using
Natural Gas Turbines: The vast majority of on-site generation relies on natural gas because it provides the continuous, high-density power required to run AI clusters 24/7. Recent research indicates that a significant portion of all planned behind-the-meter data center capacity in the US is gas-powered.
Nuclear Energy (SMRs): To meet zero-carbon commitments, tech companies are also looking into advanced nuclear options, exploring partnerships for Small Modular Reactors (SMRs) and microreactors.
Fuel Cells & Battery Storage: Operators are turning to hydrogen fuel cells and large-scale battery systems to supplement power and replace traditional, polluting diesel generators for backup.
For a closer look at how this shift is playing out across the industry, you can review the full Cleanview Behind-the-Meter Data Centers Report or this analysis from Bessemer Venture Partners.
The bottom line on water... We are never going to run out of it... Period!
All the water we have, is all the water we will always have and always have had. It gets recycled over and over and over again... Even the water expelled by astronauts comes back to earth... And the cycle continues. Water doesn’t disappear... It changes form from ice, to liquid, to steam, etc... But it does not go anywhere and it never ‘disappears’ and never has... It’s always there.
People who worry about water are misinformed.
Well all it takes is governmental abuse of water reserves, just ask California!
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