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Posted January 29, 2026 at 11:00 am
A glass of water sits by your author as he writes this piece. Earlier he drank a cup of tea. First thing this morning he washed and showered. We all consume water daily, probably often without thinking about it. And a lot of it too. For those unaware, 2026 is the ‘year of water.’ The expression was coined at last week’s World Economic Forum (WEF). The year will culminate with the United Nations hosting its third-ever Water Conference in Dubai in December.
The planet’s entire water system is “under strain” according to the WEF. At present, 2.1bn people lack access to properly managed drinking water and 3.4bn lack safely managed sanitation. At the same time, water demand is only heading one way. The AI buildout is forecast to add 30tr litres to annual water demand, fuelled by a surge in power generation (which accounts for 54% of the increase), semiconductor fabrication and data centres expansion.
The bad news is that by 2050 31% of global GDP will be exposed to high water stress. The good news is that additional demand “does not have to result in competition between industry and communities.” A report by Xylem, a major player within the water ecosystem, highlights that if wastewater and volumes lost through ageing infrastructure (which account cumulatively for 420tr litres – or 14x AI’s projected incremental water demand) were recovered through targeted investment, then these could “substantially offset” AI’s projected water growth as well as reducing strain on freshwater resources.
We have been making the case for more focused investment in water infrastructure since 2011 and argued recently that the water industry can benefit from digitalisation. Solutions that focus on managing supply – such as improved monitoring and analysis – are likely to be much more effective than those target demand. None of this comes cheaply, however. The WEF’s report suggests that ~$7tr of investment will be required to meet the UN’s goal of access to water and sanitation for all. Each incremental effort may feel like a drop in the ocean, but cumulatively, the impact could be significant.
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Originally Posted on January 29, 2026 – The year of water
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