Where silicon meets the springs: Navigating water stewardship in Texas’ AI expansion

Recent floods have shown how violently Central Texas can oscillate between catastrophic excess and chronic scarcity, making careful water stewardship even more critical as tech infrastructure expands. Yet in this same water-stressed region, construction is slated to begin on a 200-acre AI data center within the Edwards Aquifer Authority. As AI brings innovation to the Texas Hill Country, locals and conservationists grapple with the question: At what environmental cost? 

I spoke with Virginia Parker of the San Marcos River Foundation (SMRF) and Dr. Robert Mace of Texas State University’s Meadows Center for Water and the Environment about the impact of AI data centers on the San Marcos watershed. With their insights, we’ll explore how technological advancement and water conservation intersect in one of Texas’ most sensitive ecosystems so strategic planners and field engineers can develop AI data centers that meet business needs while safeguarding critical water resources. 

Examining AI infrastructure in water-stressed regions 

A mid-sized data center consumes around 1.1 million liters of water daily for cooling, about the same as 1,000 homes. Why, then, are so many data centers being built in water-stressed regions like the San Marcos watershed? 

There are a few reasons why tech companies seek out drier climes for data centers. First, dry air in regions like the southwest United States reduces the risk of corrosion and electrical issues in sensitive equipment. Other factors that make such regions attractive include abundant solar resources, access to power plants and proximity to densely populated metro areas with significant fiber optic networks. Also, tax breaks. 

While Central Texas may be dry, sunny, well populated and enticingly exempt from state sales tax, its electricity is supplied by ERCOT, whose power grid failure left nearly 10 million people without heat during a 2021 winter storm and led to the deaths of at least 246. Consider also that AI data centers have even more intense requirements for power and cooling than traditional data centers due to specialized processors and processing units, and the challenges become more apparent.  

Local water conservationists like Parker remain vigilant. “Over the past decade, we’ve seen incredible growth in the area,” she says. “But we’ve also been in a severe drought. Out of the past five years, we’re about 60 inches short in rain, which is equivalent to two full years of rain. So not only is the Edwards Aquifer not filling as much as it typically would, but we have more straws in the ground, so it’s more vulnerable to severe decline.”  

Similarly, representatives from the Texas Water Development Board (TWDB) point out that the Trinity Aquifer, another key water source in Central Texas, has been in decline over the past decade. “Shallow soils and steep hill slopes make for rapid runoff, which provides less opportunity for groundwater recharge,” they explain. “While surface water reservoirs capture some runoff, high evaporation rates from high temperatures and low humidity reduce available supply even as we save it for later use.”  

So, are AI data centers even viable in Central Texas? It ultimately depends on how well tech companies balance technological needs with ecological realities. As these facilities will require substantial water in an area that’s already wrung dry, the first priority of any strategic planner or field engineer working in water-sensitive regions should be to understand the regulatory landscape and address community concerns.  

Unpacking water rights and regulatory challenges 

Water management in Texas presents unique challenges for data center development, as the state’s “rule of capture” doctrine allows landowners significant pumping rights with minimal restrictions. But in areas like the Edwards Aquifer, where groundwater directly feeds surface water systems like the San Marcos River, this approach increasingly conflicts with conservation needs. As Parker notes, “Without that aquifer having enough water in it, we’re not going to have a river. That’s going to impact not only the environment and species that depend on the river, but communities downstream that depend on it for drinking water.”  

She’s right to sound the alarm. San Marcos is projected to run out of water by 2047, and TWDB’s predictions for Texas as a whole are just as sobering: 

• Water users face a potential water shortage of 6.9 million acre-feet per year by 2070 if historical drought conditions recur and no new water supplies or management strategies are implemented. 
• Texas’ economy faces a short-term hit of $110 billion annually, with potential losses escalating to $153 billion annually by 2070. 
• Job losses could reach 615,000 in the near term and 1.4 million by 2070. 
• By 2070, four of five Texans could face water shortages of at least 10% in their homes and communities. 
• About one quarter of Texas’ municipal water users would have less than half the water they need for basic living and working conditions if adequate water management strategies aren’t implemented.  

 
To address these issues, TWDB says they’re proactively monitoring the data center industry, exploring ways to learn more about their water use and tracking water management strategies. Meanwhile, Parker finds a silver lining in the current crisis: “The good news about severe drought is that it illustrates the fact that water is not an unlimited resource. We have limits on how much water is here in Central Texas — it’s one way to get people motivated to support legislation that protects our natural resources.” 
 
Several promising legislative initiatives are advancing to protect Central Texas water resources, including bills that would empower the Hays Trinity Groundwater Conservation District, allow cities to pause development when necessary and protect clean waterways from pollution. These measures aim to give local entities the authority they need to balance technological development with long-term water sustainability. 

“SMRF is not anti-development,” Parker clarifies. “We just want to see smart development as well as developers incentivized for good behavior.” This win-win approach, where thoughtful regulation is combined with community benefits, could be the nudge tech companies need to be both better water stewards and neighbors. 

Building bridges between technology and conservation 

Mace, a hydrologist who pioneered Texas’ groundwater modeling and led water conservation at the state level for nearly two decades, suggests several approaches companies can take to reduce water impact. His expertise in desalination and rainwater harvesting—two methods he championed at the TWDB — informs his recommendations.  

First, he suggests on-site desalination of reused water through reverse osmosis. “Over time, evaporative cooling methods concentrate dissolved solids in water, making it too salty and corrosive,” explains Mace. “Rather than dumping this water and starting fresh, companies could desalinate it on site.” 

Second, rainwater harvesting from data center roofs could create an alternative water source: “The proposed data center has a substantial roof area, perfect for capturing rainwater, which contains about 20 times less salinity than Edwards water.” 

Third, he recommends directing used water into municipal wastewater systems. This approach could be particularly valuable for San Marcos, he notes, which is developing a direct potable reuse program. 

Finally, Mace advocates for dry cooling technology. “On the spectrum of reducing water use, dry cooling is the golden ticket,” he says. “But the downside is that it requires more energy.” The proposed data center in San Marcos addresses this challenge with “an on-site, behind-the-meter natural gas-fired power plant,” according to the company website.  

Most companies lack the resources to build their own power plants, yet this approach represents a viable strategy in a challenging energy landscape. Given ERCOT’s reliability concerns, tech companies serious about establishing operations in Texas may need to implement similar solutions to ensure both water conservation and power stability. 

Meanwhile, SMRF proposes restrictive covenants for any tech company looking to build data centers in the watershed: 

• Inclusion of a closed-loop non-evaporative cooling system. 
• Reduction in living unit equivalents (LUEs) used by the data center, ideally reducing water usage beyond what’s been permitted for the proposed location.
• Enhanced storm-water management to treat runoff from roofs and parking lots.  
• Increased capacity of a nearby flood detention pond to mitigate flooding. 

 
These covenants move the needle closer to what Parker sees as “smart development” by enforcing property-specific protective measures while creating space for responsible growth. This collaborative approach could serve as a model for other water-sensitive regions facing similar pressures from both tech companies and other developers. 

Charting a sustainable path forward 

As AI infrastructure expands across Central Texas and beyond, strategic planners and field engineers who embrace water conservation as a core design principle will deliver more successful projects than those who don’t. By implementing innovations like on-site desalination and rainwater harvesting from the earliest planning stages, their companies can avoid costly retrofits while generating invaluable community support. 

What’s more, active collaboration with conservation groups like SMRF is key when it comes to accessing critical local watershed knowledge. Academic institutions like Texas State’s Meadows Center and UT Austin could serve as valuable intermediaries to tech companies, connecting technical expertise with conservation research.  

By integrating technological innovation with environmental stewardship from the planning phase through implementation, tech companies can create infrastructure that not only powers the AI revolution but also safeguards the ecosystems that sustain our communities for generations to come.

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