As Congress examines the relationship between data center growth and water resources, the U.S. Chamber is urging policymakers to support responsible development that strengthens communities, modernizes infrastructure, and keeps America competitive in the digital economy.
Neil Bradley, the Chamber's Executive Vice President and Chief Policy Officer, testified before Congress on what has become one of the defining debates of this decade: will the digital backbone that powers the modern economy be built in the United States, or will rising opposition, outdated permitting, and unresolved community concerns push that investment elsewhere?
Data Centers Are Infrastructure and Should Be Treated That Way
Every sector of the American economy is becoming more digital. Small businesses use cloud platforms to reach customers. Hospitals manage patient care through connected systems. Manufacturers optimize production with AI-driven tools. None of that works without physical infrastructure: land, power, fiber, and water.
Data centers are where that infrastructure lives. They contribute $727 billion to U.S. GDP and support 4.7 million jobs. They generate $162.7 billion in annual tax revenue that funds schools, public safety, and roads in the communities where they operate. In Virginia, data center tax revenue has allowed counties to hold down residential property tax rates while investing in schools and transportation.
Employers investing in AI, advanced manufacturing, and logistics will not locate where the digital backbone is weak. States and communities that can host responsible data center development will attract the next generation of jobs and investment. Those that cannot will watch it go elsewhere.
On Water, the Industry Has a Record Worth Citing
Local communities are right to be concerned about the amount of water data centers use. And the Chamber addressed it directly in Thursday's testimony.
Water use is a real issue. Cooling systems that keep servers running consume water. In drought-prone regions, that matters. The industry's response over the past decade is a success story.
A decade ago, the average data center consumed roughly 1.8 to 1.9 liters of water per kilowatt-hour of electricity used. Today, leading operators have driven that figure to 0.30 liters per kilowatt-hour or lower, an improvement of more than 80% in ten years. That improvement was achieved through investments by data center operators to improve efficiency and reduce their consumption.
Microsoft's newest facilities consume zero water for cooling, avoiding more than 33 million gallons per year per facility. Amazon operates 26 data centers running entirely on reclaimed municipal wastewater. Meta's facility in Beaver Dam, WI uses a closed-loop system whose total annual water use is less than two full-service restaurants. Google publicly discloses water use by location and commits to air cooling or reclaimed water at any site where local resources are at risk.
Operators are also partnering directly with local utilities. Microsoft and the City of Quincy, WA built a $31 million water reuse facility, owned and operated by the city, that reduces local groundwater reliance by 138 million gallons per year. That is not a corporate talking point. It is an EPA case study.
What Congress Should Do
Bradley offered eight recommendations to the Subcommittee. The through line across all of them: align federal policy with the goal of building responsibly, not blocking indiscriminately.
That means sustaining and strengthening the Clean Water and Drinking Water State Revolving Funds and WIFIA so communities can modernize water systems and manage costs. It means expanding water reuse incentives, modernizing permitting under the Clean Water Act and NEPA, and ensuring that large development projects do not shift costs onto household ratepayers.
The Chamber also endorsed the bipartisan Safe Drinking Water Infrastructure Improvement Act of 2026, which modernizes the Drinking Water State Revolving Fund and elevates water as a national priority.
The cost of inaction is not hypothetical. A shortage of data centers will not reduce demand for AI or cloud services. It will mean demand outpaces supply, prices rise, and the tools small businesses and working families need to compete become unaffordable. Policymakers have spent years working to close the digital divide. Bad infrastructure policy will open a new one.
The better path is the one Bradley laid out: build here, build responsibly, and build in genuine partnership with communities. The industry has already shown it knows how to do that. Federal policy should make it easier, not harder.
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About the author
Jeff Guittard
Jeff Guittard is a Director of Communications at the U.S. Chamber of Commerce.
