Gulf's AI expansion faces looming water crisis amid climate challenges

The Gulf’s rapid push into artificial intelligence is running into a hurdle that’s perhaps even more fundamental than computing resources or capital: water. A recent policy brief by the Middle East Council on Global Affairs highlights that the build-out of data centres in the region shouldn’t be viewed purely as an electrical or power issue. Because, frankly, the cooling requirements for these facilities are set to increase fastest during the hottest months, right when electricity grids and water systems are already under significant pressure.

That warning really hits home, especially for the UAE, where the AI sector is expanding along with ambitions in digital infrastructure and even climate tech. The climate conditions in the Gulf aren’t just a minor operational concern, they’re a major challenge. Summers here are scorching, humidity levels are high along the coast, and nighttime cooling options are limited. In such a climate, traditional data centre designs , ones that assume plenty of water and reasonable outdoor temperatures , become not only costly to operate but also hard to scale efficiently.

According to the council’s analysis, the region is edging toward an infrastructure mismatch. Big data centres supporting cloud services and AI training need continuous cooling, but energy and water systems tend to hit their peak demand during summer months. In many Gulf countries, desalinated water and electricity are tightly intertwined through co-generation processes, which makes it tricky to handle demand spikes. Even where reverse osmosis desalination is reducing that dependence, the longstanding system still influences how quickly new water supply can be added , it’s not a quick fix.

That helps explain why some of the most striking, yet sobering, figures in the report stand out. It mentions estimates that by 2030, the UAE’s AI industry could require tens of billions of litres of water each year. Meanwhile, Saudi Arabia’s data centre energy demands are projected to grow rapidly, and Qatar is pushing forward major AI infrastructure initiatives via investment partnerships. When you take those projects together, it’s clear that digital growth isn’t just a niche industry anymore , it’s becoming deeply woven into the region’s overall resource planning.

The brief makes a strong case that simply ramping up desalination capacity isn’t a smart or sustainable answer. Desalination consumes lots of energy, costly to expand, and it’s not free from environmental impacts. Plus, increasing water production means higher power usage and more emissions , unless that extra energy comes from cleaner sources, which isn’t always the case. So, the authors suggest that regulators should adopt a broader water-energy approach instead of just focusing narrowly on electricity.

This kind of integrated thinking is already starting to show in parts of the Gulf. For example, the Gulf Research Center reports that GCC governments are viewing water security as a strategic issue , including through a regional task force set up in 2025. Dubai, for example, is preparing to run what’s been described as the world’s most energy-efficient desalination plant, powered by solar energy. These projects are important because they demonstrate a move towards connecting water supply with low-carbon energy sources, instead of relying solely on older, more resource-intensive models.

That said, the brief emphasizes that just adding more desalination plants won’t be enough. One effective strategy, it suggests, is seasonal storage , basically, storing water and cooling capacity during times of lower demand and using it during summer peaks. The UAE’s Liwa Aquifer Storage and Recovery project already offers a case study, employing underground storage to buffer desalinated water for future use. And interestingly, this same kind of logic could be adapted more intentionally for digital infrastructure as well.

Another key recommendation revolves around regulation. The brief argues that Gulf countries need to establish standards that cover both water and energy efficiency. Practically speaking, that could mean setting limits on how much water data centres can use, pushing operators toward recycled or non-potable water sources wherever possible, and updating building codes to handle the extreme heat. This is particularly relevant to the UAE, where standards designed for cooler climates might inadvertently set in place poor design choices, choices that could lock in resource inefficiencies before a facility even opens.

Industry insiders support this view, noting that regions with limited water supplies will demand cooling systems that either slash or eliminate freshwater use altogether , especially for AI training, which creates intense heat loads. Metrics like Water Usage Effectiveness are gaining prominence, alongside innovations like zero liquid discharge systems and the use of reclaimed municipal wastewater. These aren’t just ideas on the drawing board , they’re becoming central to discussions about how new data centres can operate responsibly.

The third major recommendation pushes for mandating the use of non-potable water for cooling. That means encouraging operators to treat sewage effluent, brackish water, or other lower-grade sources for cooling purposes, reserving freshwater supplies for drinking and agriculture. The authors point out that this is already somewhat practical, especially in tech parks and industrial zones where dedicated underground pipe networks, sometimes called purple pipes, can deliver such water. The snag? Those networks are still patchy across the Gulf, making widespread adoption tricky.

This is where climate technology and infrastructure policy start to intersect. In the UAE, initiatives like treated wastewater reuse, district cooling systems, and strategic water storage are all parts of a single resilience challenge. An energy-efficient data centre that looks good on paper might still become a liability if it depends on scarce potable water at the wrong time of year.

Lastly, the report argues strongly for investing in technologies that reduce water use altogether. Liquid cooling systems, for example, stand out because they directly remove heat from servers without relying on evaporative cooling , and that can significantly cut water consumption. Some Gulf operators have already been testing such approaches, and global cloud providers have shown interest in coastal cooling solutions, including seawater-based systems. Longer-term ideas like regenerative data centres , where waste heat could be harnessed for desalination , or high-temperature chips that cut cooling loads at the source are also discussed. They may still be evolving, but these concepts show a shifting outlook about data infrastructure.

Microsoft, for instance, recently announced its goal to make AI facilities more community-friendly , which includes addressing water use with greater transparency. Meanwhile, investors are increasingly demanding clearer disclosures about water and power consumption from big cloud firms. This ongoing push for accountability is likely to intensify as data centres become more scrutinized by regulators, utility companies, and the public alike.

For the Gulf, the overarching takeaway is clear: simply importing AI infrastructure models from elsewhere won’t work. If the region wants to lead in digital services without worsening summer stress on water and electricity systems, it will need facilities tailored for its unique climate from the outset. Otherwise, the region risks a costly cycle of retrofitting, emergency resource expansion, and unnecessary strain on already overburdened systems.

The good news? The opportunity remains, and the key message from the brief is straightforward: in the Gulf, the success of AI build-out will hinge not just on compute power, but equally on water conservation and management.