Water is essential to our company, Digital Realty’s (“DLR”) operations and strategy. As one of the world’s largest data center providers, with over 300 facilities, DLR supports generative artificial intelligence (“AI”) workloads which require significant water for cooling. For instance, Microsoft used approximately 700,000 liters of water to train GPT-3. By 2027, global AI demand could drive water withdrawals of 4.2-6.6 billion cubic meters annually, equivalent to California’s annual water use.

With 20% of U.S. data centers across the economy located in drought-prone areas, these operations exacerbate existing water stress areas. In fact, 39% of DLR’s water consumption is in regions experiencing water stress.[1] The company’s 10-K filing even highlighted that “drought conditions in certain markets have resulted in water usage restrictions and proposals to further restrict water usage.”

Freshwater scarcity poses a critical global challenge. The OECD warns, "The world faces a growing water disaster. For the first time in human history, the hydrological (water) cycle is out of balance, undermining an equitable and sustainable future for all.” DLR has also acknowledged “water is essential to our business and the communities where we operate...addressing our water footprint enhances resilience and reduces our impacts on local supplies and local communities.”[1] With AI workloads expected to grow significantly by 2030, this crisis further intensifies.

The company has taken steps to reduce its water consumption, such as sourcing non-potable water where feasible and implementing dry air cooling in new construction. However, with acquisitions of existing data centers, DLR maintains the existing cooling systems which typically rely on water cooling, thereby expanding the water-vulnerable operations of the company.

With generative AI now accounting for 50% of DLR’s total bookings as of Q3 2024, up from one-third in Q3 2023, the company’s water demands are increasing rapidly.

DLR's growing operations, driven by the elevated generative AI demand, risk depleting local water resources and violating the UN-defined human right to water General Comment 15, which guarantees safe, sufficient, acceptable, physically accessible and affordable water for personal and domestic use.

Adopting a formal DLR human right to water policy would demonstrate leadership in addressing growing water stress and corporate responsibility, and the intent of the Company to safeguard community water supplies even during expansions in response to AI demand.