How data center growth is driving unlikely partnerships in agriculture

The Aug. 29 article that covered the partnership between Amazon Web Services, the ag-tech firm Arable and Mississippi State University is a great example of how the expansion of data centers to power AI is intersecting with agriculture in more ways than one. 

Let’s start with the growth of data centers because the growth of data centers directly correlates to why large technology companies like Amazon Web Services are investing in agriculture – and other nature-based interventions – to secure water supply in the watersheds where they have sites. 

While hyperscale (very large campus size) data center growth has accelerated over the past 20 years, capacity is doubling roughly every four years, and the average facility size is growing. 2025 is expected to be another record year with ~10 GW of new capacity expected to break ground globally and ~7 GW likely to be completed. 100 MW-plus campuses appear to be the new norm. Europe, the Middle East and Africa (EMEA) have seen a 21% year-over-year capacity growth to 10.3 GW with Asia-Pacific (APAC) at 12.2 GW and a strong pipeline. The past five years have seen the biggest acceleration in this space: hyperscale count doubled, total capacity doubled, project sizes hit 100 MW+ and power demand surged – especially due to AI. 

AI models are trained on thousands of GPUs (graphics processing unit – massively faster than CPUs) which requires far more power than the traditional cloud. Grid connections are a bottleneck, which is pushing operators to build bigger sites where multi-hundred MW (megawatt) power is available – or where it can add to on-site power generation. Data center electricity use is projected to roughly double by 2030 (to ~945 TWh – terawatt hours) according to the IEA (International Energy Agency). AI is the biggest driver and AI-optimized center demand is expected to more than quadruple this decade.  

Microsoft, Amazon, Google and Meta are some of the most well-known technology companies with growing data center use, and all of them have publicly declared water stewardship goals, including: 

• Microsoft, Meta, and Amazon Web Services: Water positive by 2030 

• Google: Replenish 120% of freshwater consumed  

It’s also worth noting that all these companies also have goals to source renewable energy for growth in electricity use. 

It’s widely referenced that agriculture accounts for approximately 70% of global freshwater withdrawals – it’s not news that it takes a lot of water to grow food. When data centers are being sited in arid regions, this has sparked real and perceived competition with water for farms. In this country, a good example is in Arizona where a data center was guaranteed up to 1 million gallons per day (and more at build-out), which drew public pushback. Pinal County farmers lost most of their CAP (Central Arizona Project) deliveries and had to shift to groundwater. It is important to note that Pinal County agricultural cutbacks were driven by a stack of basin-wide legal and hydrologic factors that hit ag-priority users first. Tribal, municipal, and industrial supplies come head of agriculture when it comes to CAP deliveries. This is why it’s important to note that data center water use sparks real and perceived competition – and is only one factor. However, it is worth noting that a significant share of US data centers is now sited in high or extreme water scare regions, intensifying local concern where agriculture is already viewed as stressing supplies. A reference point for how companies think about water stress is what the UN CEO Water Mandate has identified as the world’s 100 most water-stressed basins, which are river and groundwater areas where demand is highest compared to supply, making them most at risk of shortages and conflict over water use. A number of those 100 basins fall in the U.S., including the Colorado River basin. 

Commodity and row crops represent some of the best opportunities to convert to more efficient irrigation systems, and when doing so, farmers can quantify the water demand reduction going from flood to precision irrigation. Tech (and other mostly food, beverage and consumer packaged goods) companies will co-invest with farmers to upgrade their irrigation systems (including automation to drive further optimization), helping to solve one another’s challenges. With farm margins stretched thin and varying public subsidies, most commodity crop farmers lack the access to capital required to invest in a precision irrigation and automation system. When companies can help reduce this financial burden, farmers can modernize their irrigation systems, whose benefits go far beyond water reduction, including helping to maintain family farming legacies into the future. The companies get to claim the reduction in water use toward their public sustainability goal. 

Human demand for technological advancement and food continue to accelerate, so partnerships where technology and agriculture can work together will be key to reducing conflict in our rapidly accelerating world.