The burgeoning field of generative artificial intelligence (AI), exemplified by tools like OpenAI's ChatGPT, is bringing to light a critical environmental concern: the increasing water footprint of major technology companies.

What Happened: A study led by Shaolei Ren, a researcher at the University of California, Riverside, delved into the water consumption required to operate these advanced AI models.

Ren's research discovered that ChatGPT consumes about 500 milliliters for every 10 to 50 user prompts, which varies based on the model's deployment specifics.

This data highlights the significant water usage by AI technologies, considering the vast number of users these platforms attract. CNBC reports that, if not addressed, the escalating water footprint of AI could hinder the technology's sustainable and ethical application.

Big Tech's Water Usage

Technology giants such as Microsoft (NASDAQ:MSFT) and Alphabet-owned Google (NASDAQ:GOOG) have reported significant increases in water usage, primarily attributed to the demands of AI development. The necessity of water for cooling data centers, which are crucial for AI operations, is a primary factor in this surge.

For instance, Microsoft's water consumption escalated by over a third from 2021 to 2022, amounting to nearly 1.7 billion gallons.

Google And Microsoft's Environmental Goals

Google's water usage at its data centers and offices reached 5.6 billion gallons in 2022, marking a 21% increase from the previous year. Both companies are actively working toward reducing their water footprints, aiming to achieve a "water positive" status by the decade's end, where they replenish more water than they consume.

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According to a Google spokesperson, research shows that, while AI computing demand has dramatically increased, the energy needed to power this technology is rising "at a much slower rate than many forecasts have predicted."

"We are using tested practices to reduce the carbon footprint of workloads by large margins; together these principles can reduce the energy of training a model by up to 100x and emissions by up to 1000x," the spokesperson said, according to CNBC. 

The Challenge Of Sustainable AI

However, introducing AI-driven services like Microsoft's Bing Chat and Google Bard could lead to further increases in water consumption.

Somya Joshi from the Stockholm Environment Institute highlighted the paradox of technological efficiency leading to greater resource use, especially in water-intensive cooling processes for AI servers and models.

“With AI, we're seeing the classic problem with technology in that you have efficiency gains but then you have rebound effects with more energy and more resources being used,” Joshi told CNBC.

"And when it comes to water, we're seeing an exponential rise in water use just for supplying cooling to some of the machines that are needed, like heavy computation servers, and large-language models using larger and larger amounts of data," she added. 

This growing environmental challenge poses a dilemma for Big Tech: advancing AI innovation while ensuring it does not exacerbate the strain on vital water resources.

What It Means For One Water ETF

At the same time, the environmental issue at hand also appears to increase the appeal of a $1 billion ETF that Bank of America Corp (NYSE:BAC) recently proposed as a strategic investment in water.

The goal of the First Trust Water ETF (NYSE:FIW) is to mirror the ISE Clean Edge Water Index's performance, excluding costs and expenses. It focuses its investments on companies that generate a significant portion of their revenues from the potable and wastewater sector.

Given the scarcity of water and the rise of generative AI, the ETF could prove to be even more compelling to investors. 

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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