My perspective from someone who wants to understand this new AI landscape in good faith. The water issue isn't the show stopper it's presented as. It's an externality like you discuss.
And in comparison to other water usage, data centers don't match the doomsday narrative presented. I know when I see it now, I mentally discount or stop reading.
Electricity though seems to be real, at least for the area I'm in. I spent some time with ChatGPT last weekend working to model an apples:apples comparison and my area has seen a +48% increase in electric prices from 2023-2025. I modeled a typical 1,000kWh/month usage to see what that looked like in dollar terms and it's an extra $30-40/month.
Is it data centers? Partly yes, straight from the utility co's mouth: "sharply higher demand projections—driven largely by anticipated data center growth"
With FAANG money, that's immaterial. But for those who aren't, that's just one more thing that costs more today than it did yesterday.
Coming full circle, for me being concerned with AI's actual impact on the world, engaging with the facts and understanding them within competing narratives is helpful.
It's not even an externality? They just pay market price for water. You can argue the market price is priced badly (e.g., maybe prices are set by the state), but that doesn't make it an externality. The benefits/costs are still accrued by (and internal to) buyer and seller.
If datacenters are getting electricity and water at a rate lower than retail (costs passed on to residents or tax payers), and factors like noise and water pollution aren't factored in, then yes there are unpriced externalities.
My perspective from someone who wants to understand this new AI landscape in good faith. The water issue isn't the show stopper it's presented as. It's an externality like you discuss.
And in comparison to other water usage, data centers don't match the doomsday narrative presented. I know when I see it now, I mentally discount or stop reading.
Electricity though seems to be real, at least for the area I'm in. I spent some time with ChatGPT last weekend working to model an apples:apples comparison and my area has seen a +48% increase in electric prices from 2023-2025. I modeled a typical 1,000kWh/month usage to see what that looked like in dollar terms and it's an extra $30-40/month.
Is it data centers? Partly yes, straight from the utility co's mouth: "sharply higher demand projections—driven largely by anticipated data center growth"
With FAANG money, that's immaterial. But for those who aren't, that's just one more thing that costs more today than it did yesterday.
Coming full circle, for me being concerned with AI's actual impact on the world, engaging with the facts and understanding them within competing narratives is helpful.