With the prosperous development of the AI industry, after the surge in demand for electrical utilities, the industry is now facing a new major challenge - water shortage.
JPMorgan said that AI data centers are widely concerned because of their large electricity consumption, but people often overlook their high water consumption.
Because server chips generate a lot of heat during operation, improper heat control can affect the stable operation of data centers. Therefore, tech giants need to consume a lot of water resources to cool down data centers.
Morgan Stanley cited data from Bluefield Research in a research report pointing out that the total water consumption of global data centers (including on-site cooling and off-site power generation) increased by 6% annually from 2017 to 2022. The report estimates that by 2030, water consumption may jump to 450 million gallons per day. This is equivalent to using about 681 Olympic standard swimming pools of freshwater per day to cool down global data centers.
Currently, most global data centers use fans to circulate air to reduce temperature. However, chips with increasing power are pushing this air cooling system to its limit.
One way to overcome this problem is to run liquid coolants through pipes in servers to absorb heat. Liquids have a greater heat capacity and transfer heat faster. In the same volume, water absorbs more than 3,000 times the heat of air.
The AI sector was the mainstream for US stock market bulls from last year to this year. From AI servers to AI PCs, multiple sparks of bullish covers flourished and even spread to related stock markets affected by the AI-triggered water crisis. In addition to water scarcity, the AI craze will also cause problems with sewage treatment, especially in the semiconductor industry. In the electronic production process, there will be a large amount of metal waste liquid, mainly containing copper waste liquid, which will also benefit enterprises that recycle customers' waste water and recover valuable metal products from it.
For investors seeking growth opportunities, the water affairs industry is undoubtedly an area worth paying attention to. Especially now, the national water infrastructure repair and upgrading demand is pressing.
Looking at the global market, using ETFs should be the most convenient channel. There are currently six thematic ETFs focused on water resources listed in the United States, including$Powershares Exchange Traded Fd Tst Water Resource Portfolio (PHO.US)$, $Ecofin Global Water ESG Fund (EBLU.US)$, $First Trust Water ETF (FIW.US)$, $Powershares Exch Traded Fd Tr Ii Global Water Portfolio (PIO.US)$, $Claymore Exchange Traded Fund Tst 2 Guggenheim S&P Global Water Index Etf (CGW.US)$, $GLOBAL X CLEAN WATER ETF (AQWA.US)$.
The largest of these is the Power Shares Water Resources Portfolio, which tracks the Nasdaq OMX US Water Index and invests in a series of companies in the water affairs industry. This ETF has gained nearly 9% this year.
This ETF holds, among others, provider of water sanitation and infectious disease prevention solutions, $Ecolab Inc. (ECL.US) $; one of the world's largest water affairs companies and US' largest private water affairs company. $American Water Works (AWK.US)$The world's largest supplier of water supply and sewerage treatment solutions.$Xylem (XYL.US)$and other water resource companies.
In addition, there are many water-related companies in the US stock market, and mooers can check them in the$Utilities - Regulated Water (LIST2458.US)$sector, including public water supply and sewerage companies.$Essential Utilities Inc (WTRU.US)$the second-largest water and waste service provider in the USA$Essential Utilities (WTRG.US)$water supply company$American States Water (AWR.US)$and other companies.
Mooers,
do you think water resources will be the next trading mainline for AI?
Feel free to leave your thoughts in the comments section~
Editor/Somer