Lead Author: Whitney Nguyen, CFA, Director of Impact Research

Co-Authors: Tenzing Tashishar, Investment Research Analyst; Madison Kreiger, MBA, Activism & Impact Research Analyst

In 2024, the OECD warned: “The world faces a growing water disaster. For the first time in human history, the hydrological cycle is out of balance, undermining an equitable and sustainable future for all.” Since 2015, the World Economic Forum has also ranked the water crisis among the world’s top five risks annually.

“Drinking From an Empty Cup” reveals a hidden but rapidly growing risk in the AI boom: water. As tech giants scale their AI infrastructure, training a single model like GPT-3 can consume over 700,000 liters of water, drawing from the same drinking water supplies that sustain local communities. With 20% of U.S. data centers located in drought-prone regions, companies face mounting regulatory, reputational, and operational risks. This report equips investors with a toolkit to assess portfolio exposure, demand transparency, and drive responsible water stewardship across the AI value chain—before water scarcity becomes the next material crisis.