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The Water Services Association of Australia (WSAA) has raised concerns over the increasing water demand from data centers, which now matches that of entire residential areas. Australian data centers require between 5 and 40 million liters of water daily for cooling servers, equivalent to the consumption of approximately 80,000 homes.

By 2035, WSAA projects that data centers could consume up to 90 billion liters annually, representing 15-20% of Sydney's water supply. This rapid expansion, driven by AI technologies, raises questions about urban water infrastructure resilience.

WSAA recommends improving cooling efficiency, promoting water reuse, enhancing consumption transparency, fostering dialogue between data center operators and water utilities, and establishing new regulatory criteria. Political discussions have emerged, with Green MP Abigail Boyd warning that daily water consumption could reach 250 megaliters by 2035, stressing an already vulnerable water system amidst climate change.