Commerce Secretary Lutnick States Data Centers Do Not Use Water

The claim contradicts published consumption figures from Microsoft, Google, and federal environmental disclosures, creating a policy-relevant factual dispute over how the U.S. Regulates AI...

Commerce Secretary Howard Lutnick told CNBC on Wednesday that data centers 'don't use water,' a statement that contradicts consumption data published by the facilities' own operators and federal environmental records. The Hill reported the remarks on September 2, 2026.

Lutnick made the statement while discussing artificial intelligence infrastructure expansion, a portfolio that falls under the Commerce Department's remit following the Biden-era CHIPS and Science Act implementation and continued under the current administration's AI executive orders. The Commerce Department did not respond to published requests for clarification about what Lutnick meant by the phrase.

Data center water use is documented in corporate sustainability filings and state environmental permits. Microsoft's fiscal year 2023 environmental sustainability report disclosed that the company's global data center operations consumed approximately 6.4 million cubic meters of water that year, up from 3.4 million cubic meters in 2021. Google's 2023 environmental report listed data center water consumption at approximately 5.6 billion gallons in the United States alone. Both figures are drawn from the companies' own published sustainability disclosures.

The primary mechanism of water use in large data centers is cooling. Facilities that use evaporative cooling towers draw water to dissipate heat generated by server hardware. A secondary method, direct liquid cooling, also requires water or water-based coolants in some configurations. The U.S. Department of Energy's Lawrence Berkeley National Laboratory published a 2024 report estimating that U.S. Data centers collectively used between 1.7 billion and 2.0 billion gallons of water per day, depending on cooling technology mix.

The policy relevance of Lutnick's statement lies in the federal government's role in incentivizing data center construction. The CHIPS and Science Act, passed in 2022 (Public Law 117-167), authorized Commerce to award manufacturing and infrastructure grants. Subsequent executive actions under the current administration have directed agencies to accelerate AI infrastructure permitting. Communities selected as data center sites have raised water availability as a primary concern in local planning proceedings.

Lutnick's Commerce Department oversees the National Telecommunications and Information Administration, which administers broadband and technology infrastructure grants, and the Economic Development Administration, which has funded technology park development. Neither agency's published grant criteria, as listed on USASpending.gov, currently requires a water-use impact assessment for data center projects.

The statement drew attention because federal infrastructure policy can affect where data centers are built and how water use is weighted in siting decisions. If federal agencies do not require water-impact disclosures as a condition of grants or permits, communities that host federally subsidized facilities may lack advance data on consumption draw.

Republican and Democratic lawmakers have both sought data center investment in their districts. No floor vote or committee markup has occurred in the current Congress specifically on data center water standards, according to the congressional record as of September 2, 2026. A bipartisan letter sent to the Department of Energy in 2024, signed by members of both parties, asked for improved federal data on data center energy and water use, but that letter predates the current Congress.

The Environmental Protection Agency maintains a WaterSense program and tracks industrial water use categories, but data centers are not separately enumerated as a regulated category under the Clean Water Act's industrial discharge permit system. State-level permits govern most individual facility water withdrawals, meaning federal visibility into aggregate consumption is limited to voluntary corporate disclosures and academic estimates.

What remains unknown is whether Lutnick's statement reflects a formal Commerce Department policy position that would affect grant criteria, permitting guidance, or interagency coordination on AI infrastructure. A published policy memo or Federal Register notice from Commerce, if one exists, would clarify whether the remark was an off-the-cuff error or a statement of department posture. No such document had been published as of this report. The CNBC interview transcript, if released in full, would also provide additional context about what Lutnick was specifically contrasting data centers against when he made the remark.