How Missouri can make sure AI data centers don’t trigger a water crisis | Opinion

Missouri currently houses at least 70 data centers, and is positioning itself to further benefit from the increased demand for more infrastructure to support artificial intelligence. The importance of creating policies that will lead to our state’s economic growth can’t go understated. Missouri saw an annual real gross domestic product growth of 1.67% from 2014 to 2024, lagging behind the country’s 2.3% growth over the same time period. In 2024, Missouri’s real GDP per person ranked 36th in the nation. The state is committed to accelerating its growth, and AI-friendly infrastructure and policies will play a pivotal role. However, these policies must also make sure that this growth doesn’t come at the cost of the state’s natural resources.

In April 2015, to encourage companies to build data centers in the state, the Missouri Department of Economic Development launched its Data Center Sales Tax Exemption Program. Similar programs exist in most states. This program is designed to attract high-tech investment by granting a temporary exemption of the heavy tax burden that is usually incurred when building a new facility or expanding an existing one.

Currently, Kansas City has some of the most hyperscale data center activity in the state. These centers are engineered for extreme scalability and large workloads. Many of them are used to support the growing AI sector. This will continue to be true, as Project Krestel will bring a $100 billion data center campus to the city’s Northland region. This campus will include six hyperscale data centers, which can each consume an average of 550,000 gallons of water per day.

Driving economic prosperity to ensure Missourians thrive is pivotal, but we must not overlook the environmental strain that data centers put on surrounding communities. This strain is particularly due to the large amounts of water they require to run properly. To highlight the importance of environmental sustainability and prioritize the well-being of Missourians, while still empowering builders to pursue their business goals, the state should require all data centers to measure and report what’s known as their WUE or water usage effectiveness.

The technologies inside data centers create incredible amounts of heat. To protect the hardware, water is circulated throughout the building to absorb the thermal energy. This water is then transferred outside the data center, where it is evaporated. This process can vary by center, but it often requires large amounts of fresh water. WUE measures how efficiently data centers use water by comparing total water consumption to the energy used by its computer equipment. Tracking and reporting this provides a needed picture of environmental effects, and how to improve sustainability over time.

Missouri has already taken steps to protect its residents from data centers’ effects on local resources. In November 2025, the Missouri Public Service Commission passed rules that require large energy-using companies to cover the full costs of their electricity and infrastructure service. They also prevent Ameren Missouri from shifting increased costs to other customers.

Calculating WUE can lead to beneficial business outcomes. Doing so would allow data centers to assess sustainability, reduce costs, optimize cooling system efficiency and improve community relations. There are already proven practices that centers can adopt to improve their WUE, such as using recycled water and setting water usage thresholds. An example of policy that encourages these practices exists in Kansas Senate Bill 98. Under this legislation, data centers must prove they’re using practices that conserve, reuse and replace water to qualify for tax credits.

Requiring data centers to track and report their water usage effectiveness would be another step towards ensuring a sustainable Missouri, alongside investing in the state’s economic growth. As the presence of data centers continues to grow, the private and public sectors have the opportunity to collaborate to advance the state’s economic development and environmental resilience — for the good of all Missouri residents.

Jabari Chiphe is a 2026 Master of Business Administration candidate at Olin Business School at Washington University in St. Louis.