Microsoft has announced an innovative design for its data centers that aims to optimize artificial intelligence (AI) workloads while achieving zero water consumption for cooling. This initiative is part of the company’s broader sustainability efforts as it expands its infrastructure to support AI and other advanced technologies.

The new design, which was unveiled in August, features a closed-loop cooling system that allows for precise temperature control without relying on water evaporation. Traditionally, Microsoft data centers have used water that is evaporated on-site to mitigate power demand from cooling systems. However, according to Steve Solomon, Microsoft’s vice president of datacenter infrastructure engineering, the company will transition to mechanical chip-level cooling systems instead.

This shift enables data centers to operate at elevated temperatures, which helps optimize energy efficiency through high-performance economizing chillers. Solomon noted that this change will not significantly increase overall annual energy usage compared to previous evaporative cooling systems.

Microsoft plans to pilot the zero-water cooling designs in new data center projects in Phoenix, Arizona, and Mount Pleasant, Wisconsin, scheduled for 2026. Additionally, new sites featuring this next-generation cooling technology are expected to start coming online in late 2027.

The effort to reduce water consumption aligns with Microsoft’s previous sustainability goals. The company has achieved an 80% improvement in Water Usage Effectiveness (WUE) since launching its first generation of data centers, which relates total water consumption for cooling to the energy used by IT equipment.

Air cooling systems are an alternative to water cooling in data centers. While evaporative cooling methods are more energy-efficient but deplete water resources, air cooling consumes no water but requires significantly more energy.

To enhance resource efficiency, data center operators, including Microsoft, are looking to employ methods that align with local resource availability and sustainability goals, driven by increasing regulations and the need for greater environmental responsibility.

The concept of closed-loop cooling systems, which recycle water used in cooling, has been used in other industries for years. As AI technologies require more energy, this solution has become economically viable for data center operations. Implementing such innovations not only reduces resource consumption but also serves as an important branding strategy for Microsoft as it faces greater scrutiny regarding its environmental impact amidst the growth of its data center operations.

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