With natural water sources disappearing, all water will eventually have to be “manufactured” in some way. New technology and upgrades to water infrastructure will lead to a long-term rise in costs, making water truly “blue gold”.

In Part 2, I will cover the specific sectors and individual companies likely to see increased growth. Below, I go into more detail about the problems, causes, and solutions for the burgeoning “water bankruptcy” crisis.

The Problem

The core of the issue is that we consume more freshwater than the earth can provide, leading to the destruction of natural water sources. This problem has escalated rapidly over the last century due to increased agricultural needs and, more recently, the hyper-escalation of the AI buildout.

The natural water sources that are slowly disappearing include:

Underground aquifers
Rivers and lakes
Swamplands
Glaciers
Rain (which is beginning to vanish from certain regions)

Historical overview

Industrial Revolution (1800s–1950s): Water usage exploded, partly due to production needs and the development of piping infrastructure that made water seem infinite.
Post-WW2: A population boom led to massive water use for farming and industry, exceeding the rate at which rain could replenish natural sources.
Modern Day: Climate change has shifted rain patterns, making many areas significantly drier. Throughout history, civilizations without access to clean water have either migrated or died out. Today, we use infrastructure to prevent this, but the high cost of maintenance is becoming unsustainable for many communities.

Current status

Freshwater is finite; only about 0.5% of all water is clean and usable.
Agriculture remains the largest consumer of freshwater.
AI infrastructure and population growth are constantly increasing demand.
Current infrastructure is aging and requires significant investment.

Water Usage by Group:

Group	Usage	Details
Agricultural	70%	Farming and cattle
Industrial	20%	Factories, data centers, …
Direct human use	10%	Direct daily usage of water for cleaning, cooking and drinking.

Water Source Usage:

Water Source	Usage	Details
Rivers & Lakes	70-80%	Easiest and cheapest to access
Underground Aquifers	20-30%
Sea Water (Desalination)	1%	Main source in the Middle East; costly to treat
Rain	<1%	Increasingly used for residential buildings

Water Stress Levels:

Water bankruptcy is measured by “water stress,” comparing human “take” against nature’s “refill”. While usage under 10% is considered safe, exceeding 25% puts significant stress on the source. If usage exceeds 100%, the source is being depleted faster than it can recover, leading to permanent destruction.

Period	Stress Level (global average)	Details
Past (1990s)	11%	Primarily localized issues in dry regions.
Present (2025/26)	18.2%	25% of global crops are now grown in high-stress areas.
Future (2030)	22-25%	700 million people projected to be displaced by water scarcity.
Future (2050)	>30%	60% of the world’s population will face seasonal water shortages.

The global averages show a clear and rapid rising pattern. For some regions the stress levels are already at alarming levels.

Region	Stress Level (average)	Details
Middle East	>80%	Many countries are at >100% stress levels, meaning they use more then it refills and are drying / destroying those water sources.
Asia	25%-75%	South Asia (India/Pakistan) have extreme levels of >75%. South East Asia is lower but facing massive seasonal water shutoffs.
Africa	15%-80%	Sub-Saharan Africa has water but lacks the infrastructure. North Africa is at >80%.
USA	15%-80%	Southwest (CA/AZ/NV) stress levels are at >80%. Colorado River is physically shrinking.
Europe	10%-40%	Southern Europe (Spain/Italy/Greece) are now hitting >40% stress annually.
Russia	<5%	Russia holds some of the world’s largest reserves (Lake Baikal), but most is in Siberia, far from the population centers.
Canada	<1%	Canada has nearly 20% of the world’s surface freshwater. They have virtually no risk of disappearing water sources.

The Causes and Threats

While “Big Agriculture” is the largest offender by volume, the fastest-growing threat is the rapid construction of hyperscale AI data centers.

Hyperscale ai data centers

Liquid cooling (direct usage): The average hyper-scale data center draws around 5 million gallons (189 million litters) per day, that would be enough to provide all the water needs of 50k people.
80% of the water they use, mainly for cooling, evaporates The total is projected to reach 2 billion gallons per day by 2028 in the US, that’s double of the entire water usage of New York City. Water cooling is the only viable way to cool these high performance chips, air wouldn’t be sufficient enough anymore.
Toxic runoff (direct impact): Because cooling towers repeatedly cycle water, the chemicals used to prevent biological growth become highly concentrated, creating a discharge that can strain local treatment plants.
Power generation (indirect regional usage): The high performing GPUs need a lot of power. To generate the electricity the powerplant needs about twice the amount of water then what they already use for liquid cooling.
Hardware manufacturing (indirect usage): Manufacturing new GPUs is very water intensive. Per single GPU chip they need about 100 gallons (378 liters) of water. Large scale center can easily have 300k GPUs installed, some even more then a million. This is further enhanced by the need to replace them every 2 years if they want to keep up with the technology and their competitors. They become more efficient every time, but that doesn’t mean they are going to use less water and electricity, they would just be able to increase the amount of GPUs.

Big Agriculture and Food Processing

About 70% of the world’s freshwater is used for agriculture.
Food Process: It takes 2,000 to 5,000 liters to produce the food one person eats in a single day. That is if we would calculate every single drop that went into the food that is on our plate, from the water needed in the corn we fed the chicken to the more simple water that was needed to grow a tomato. To put into contrast a vegetarian diet would only be around 1,000 liters. The more steps and more processed the food is the more water that will be needed. This is why agriculture is always going to be the top spender of water.
Water Waste: 40% of the water they use is wasted. This could be eliminated if they would invest in technologies that water the crops and plants more precise. Investing in precision drip or ai managed smart technologies can increase their profits in the long run both by using less water and less fertilizer. Most wait until the government provides subsidies so they can make even more profits, they are basically holding the world’s fresh water hostage.
Seniority Loophole: In the US they also work with a seniority system during dry seasons. The older the farm the higher they are on the list and can grab all the water they need before the next farm can. New farms are low on that list and often cant get any water when rationing is in affect. Big groups often buyup old farms, not for the farm itself but for the right and priority they get to get all the water they need.
No Drought Restrictions: Big agriculture corporations often don’t have to ration during drought. Both by the fact that they own natural water source right or they have deals with the government so they can keep operating at full capacity.
Water Trade: Buying and selling farms has become more about the rights to water. In many cases the water rights make up almost 50% of the farm’s value, in extreme cases even 100%. During droughts the value of these kind of farms will increase in value dramatically, making the big corporations that bought them all up a lot of money.
Pollution: Some don’t do enough to clean waste water from pesticides and fertilizers

Negligent & corrupt governments:

Lack of Investments: Providing clean water for your citizens requires big investments that don’t get a return, that’s why some governments don’t prioritize these type of investments, especially in rural areas.
Water Apartheid: This is also one of the main reasons many countries are seeing huge divides between wealthy and poor districts. Small villages in rural areas are essentially forgotten while wealthy urban areas get all the needed investments to get clean and healthy water, although at high water prices. South Africa is a good example. Urban areas like Johannesburg and Cape Town get advanced water infrastructure while rural areas are forgotten.
Corporations first: In Chile for example water rights aren’t connected to land ownership anymore. Meaning corporations can buy up the rights to the fresh water that would other wise be used by the residents and farms. In many areas the people and local businesses don’t have any water, leading to more and more ghost towns. In cases like this the government shift the blame to the corporations and also attracts big mining companies to nearby areas increasing the corporate tax revenue. In Chile’s case they started changing these water rights around 2022 so that human consumption is being prioritized, the corporations however are still fighting these changes.
Downstream pollution: Governments that have these lax laws and regulations make it worse for neighboring countries and states. Especially downstream areas get to deal with their industrial waste water. Unregulated rare-earth mines in Myanmar use acids to dissolve rocks while the government doesn’t care about the downstream farmers and people in Thailand where tests showed 100 times the safety limit of heavy metals in the water.

Privatization of water services:

Design-Build-Operate (DBO) Cycle: In the US and many other places the infrastructure (pipes and facilities) are mostly owned by the cities themselves. Designing, building and operating it is outsourced to private companies. Other then lack of insight they also become depended on them because they implement their own proprietary software and systems. This makes it hard to replace these companies.
Long-Term Planning: Private contracts (to maintain and operate these facilities) are often between 10 and 25 years and may lead to deferred maintenance toward the end of the contract. Facilities run by the cities directly (aka the public) will plan for 50–100 years ahead ****to ensure that the infrastructure stays intact for the next generation.
Profit vs. Quality: Private entities focus more on profits, their focus wouldn’t necessarily be to look for the best long-term and most durable solutions. All the focus for publicly held entities would go towards the service delivery and not capital extraction.
Geographical Neglect: private companies have less incentive to provide quality and more investments to areas whit less people rather than big cities. When they do operate in such areas the costs can 60% higher then in more populated areas.
Public Power & Transparency: Citizens would have more power via voting on officials or holding officials accountable if facilities are operated publicly. Private companies lack transparency and are shielded from public scrutiny.
Europe is on the forefront of re-municipalization after they tried outsourcing and saw the prices increase and quality decrease.
UK (England) and Chile are practically entirely owned and managed by private companies, this leads to higher prices and neglected infrastructure. The UK’s largest utility company is also on the verge of bankruptcy because they keep issuing debt to pay the high shareholder dividends.

Water bottlers

Buying Up Sources: Water bottlers buy up natural fresh water springs and underground aquifers making less freshwater sources available for the population.
The 3-to-1 Rule: Producing plastic bottles wastes around 2L of water per 1L bottle, mainly in the cooling process.
Poor area markup: Not directly the fault of the bottlers but poorer areas that have unhealthy and bad water infrastructure have to rely on bottled water that can be 10,000% more expensive then tap water.
Logistics pollution & Energy waste: Pumping, bottling, packing and shipping bottled water all over the world is a huge energy waster and creates unnecessary pollution. During the whole production line lots of energy is needed, to generate energy a lot of water is needed in itself.
Microplastic problem: Plastic bottles is one of the biggest contributors to the rise in microplastics in out water supply. From landfills or waterways microplastics seep into underground aquifers and other water sources.
The Flint Michigan water problem has been a well talked about topic. The citizens had to pay the highest prices for their water that was filled with toxic lead. During the same time Nestlé was pumping millions of gallons of clean water from the state’s aquifers and they only had to pay a mere $200 per year for it.

Big industrial factories

Polluted Waste Water: Waste water from factories or leaks in their process is a big risk of polluting nearby fresh water sources. Negligence and lack of governmental oversight can make these problem go unnoticed for decades, leading to long lasting catastrophic consequences.
Thermal Pollution: Factories use water to cool their machinery and release it back into the river after. Although the water might be clean, the water is warmer and has less oxygen. This can lead to fish and the ecosystem to die.
Air pollution: Chemicals that are released into the air will come down with the rain and seep into the fresh water supply
No Consequences: They often have to get caught first before they fix the problems. They can also drag lawsuits out for long times and even then the fines they have to pay can be low compared to the damage. Not much incentive make investments to prevent if they make more profit by just doing the bear minimum and fixing problems when they arise rather then preventing.
The The DuPont C8 / Teflon case: DuPont might be the biggest example. For decades it was dumping C8, a toxic forever chemical, in the Ohio river and pits that didn’t have any lining. Since the 1960’s they knew it was toxic but due to self-regulation practices they didn’t disclose it was a toxic chemical. It took until 1990s for it to come to light and then it took another 20 years of litigation. By the end they only had to pay $670 million, a drop in the bucket for a company that makes billions in profits each year. Beyond the 99% of the US population affected, C8 is found in people all over the world and significantly enhancing the likelihood of serious medical complications over time.

Population growth

Always increasing: The world population is always increasing. This makes the need for water also always increasing. Not just for the daily use of humans but more people means more agriculture, more manufacturing, more electricity needs … everything increases.
Tripled in 70 years: In 2026 we have 8.3 billion people in the world that’s triple the amount from 70 years ago in 1956 when the population was 2.8 billion. Population growth has been slowing in the last year to below 1% yearly, it used to be around 2% before the 1970s.
Double growth rate: Water use grows at double the rate than the human population does. This is because we are constantly living more resource intensive lifestyles. We use more energy, newer technology and just consume more products that all require a lot of water to produce.

Environmental Changes

Virtual Water Trade: When already water-stressed areas export lots of food products they are essentially trading well needed water too since a lot of water is needed to produce any type of food. Mexico is a prime example here when they export a lot of produce (tomatoes, avocados, …)
Shifting Rain Patterns: Climate change is causing historical rain patterns to move away from traditionally dry or stressed areas, significantly increasing the frequency of droughts
Melting Glaciers: The rapid melting of glaciers is disrupting the natural “storage” of water. This creates a dangerous cycle of seasonal flooding followed by extreme droughts because the steady, year-round flow of major rivers is lost.

The solutions

Natural freshwater sources are finite, most solution will be about reducing the use of water and recycling the used water. The world’s population is massive and always growing, even if the growth stopped it wouldn’t make a difference.

So the main thing we should focus on is reducing the stress on the need and access to fresh water.

Its always good to be optimistic but most solutions, especially those that come at a cost (or less profits), are going to be a slow process.

Salt Water Treatment Plants (Desalination):

Removing Salt: Desalination technology can remove salt and other minerals from salt water, making it a good way to start turning sea water into usable water.
Expensive: Far from perfect it still is very expensive, energy intensive and impracticable for places that are not near an ocean. It also comes with a waste product that needs to be strategically released back into the ocean as to not cause harm to the marine life.
Primary Source for Middle East: This process is already used as a primary source for many middle eastern countries (42% global capacity) like Saudi Arabia, since they don’t have much access to freshwater it accounts for more then 50% of their domestic needs.
Global Adoption: It is also growing strong in Asia (20% global capacity), North America (12% globally) and Europe (9% global capacity)

A.I. Hyper Scale Limitations:

Since the rapid ai growth is one of the most increasing problem for the water supply it should be addressed sooner rather then later.

Restrict Locations: Location would be the first restriction, don’t build ai data centers in stressed areas.
Infrastructure Investments: Make them invest into clean water solutions and infrastructure
Limitations of output: Technology doesn’t like to be limited but at some point the fast growth can lead to the slow destruction of the planet.

Agriculture efficiency:

Smart and efficient irrigation: Such integrations will slowly and directly drip water to the root system of the plants. Further enhanced with sensors to adjust the quantity needed. All to ensure there is no water wasted, up to 90% reduction then classic farming techniques. Such systems can cost a lot to implement and is the main reason that it is often not a priority.
Climate resilient crops: crops that can easily withstand droughts or extreme heats. This can be from naturally strong plantings (potatoes, quinoa, cowpeas, ..) but can also done by genetically modification.

Re-municipalization of water facilities:

Operational control: Having both ownership and full operational control leads to a better delivery service and cheaper water for the population.
Lower cost: Less focus on capital extraction will slow down the rising cost of water.
Long-term thinking: Having the ability to think in 50-100 year terms is far better then private companies working with 10-20 year contracts.

PFAS treatment:

New 2026 regulations in the EU and USA have set near-zero limits for “forever chemicals”.
PFAS treatment investments: Standard treatment plants cannot remove these, they will need to be replaced or undergo huge upgrades.

Making Wastewater Drinkable

Cleaned and treated wastewater is a viable source of water, 8% to 11% of the world’s treated wastewater is reused the rest is discharged back into the environment. More investments for special treatment plants are needed.
The idea of making dirty waste water safe to drink is still not a popular solution.

Daily Life:

Naturally its not all up to corporations or governments. Human behavior dictates most of the actions of the agriculture and corporations.

Less processed foods: Since the huge amounts of water that are needed (2,000-5,000 liters) just for our daily food changing our diet would have a huge impact. Even just skipping meats on certain days will reduce those numbers drastically but especially the extreme processed foods would need to be limited.
Less bottled drinks: Using 3 liters of water just to produce a 1 litter bottle of water just doesn’t seem sustainable. Making more use of a refillable can is an easy solution here. Since our society has become accustom to the easy access of bottled drinks i don’t see this number decreasing a lot. Drink dispensers could be a viable solution where you fill your can with your drink of choice but that would require a huge shift in consumer behavior and would be impractical if not consumed directly.
Harvesting rainwater: Newly build houses need to install more rainwater collecting systems, in Europe this is already normalized. Rainwater can be used for regular plumbing use, gardening, cleaning etc.

Managed Aquifer Recharge (MAR) & Lake Augmentation

Excess cleaned waste water needs to be discharged back into underground aquifers or lakes. This will prevent stressed water sources from drying up and will move the water trough the whole natural filtering process.
Growing strategic solution but not yet a global standard
In Saudi Arabia we also start to see lakes being filled up with desalinated seawater so that these natural sources don’t dry up and get destroyed.

Stricter Governmental regulations:

Protect and restore water ecosystems both for water sources as well as forests which act as a natural filtration system
More regulations and diagnoses to limit pollution
Transboundary cooperation for shared water source like rivers, lakes and aquifers to prevent pollution and over-use

Predictions

The deficit of natural fresh water and the earth being able to replenish will continue to increase until we eventually cant rely on it anymore. Many experts project that by 2050 we will really start seeing and feeling the impact.

Manufactured fresh water future

Natural fresh water is decreasing rapidly so we will eventually rely completely on “manufactured” fresh water, water that has to go trough multiple facilities to become safe and usable.

More control by corporations: All the usable water will need more technology and run trough even more treatment plants and pipelines, giving even more control to corporations.
Higher cost of water: More investments in infrastructures and new technologies (like desalination and PFAS treatment) means more investments and higher costs.
Desalination: Since almost all other natural water is disappearing the salty sea water is going to be a one of the biggest sources of water in the future

Environmental impact

Collapsing ecosystems: We will continue to use more natural fresh water then the earth can replenish. This will destroy ecosystems and dry up rivers, wells and aquifers.
Mega storms: More water will eventually evaporate into the atmosphere and not enough will go back into the ground. This will cause drier land and increase mega storms.
Glaciers & Rain Patterns: We will continue to see glaciers melting and historical rain patterns shifting, causing more risk of droughts in already stressed areas.

Geographical impact:

For locations that relied mainly on nearby natural water sources will have huge impact.

Water droughts and shutoffs: Dry and low populated areas will not get enough solutions to get usable water. In many places they already have prolonged shutoffs of tap water, sometimes for weeks on end.
Migrate or die: Just like we seen historically some people will have to migrate to newer areas that have better access to water. Not doing so will lead to poor health and lower lifespan.
Sinking Cities: water decline from underground aquifers makes the soil around it unstable and at high risk of “sinking” (land subsidence). Over 2 billion people already live on “sinking ground”.

Re-municipalization:

Hard to re-municipalize: In places like the United States, companies are too entrenched in the water infrastructure for things to change anytime soon. Furthermore the US has over 50,000 separate water systems many operated by different companies each with their own proprietary systems which makes it hard to replace them.

Conclusion

We are in a race to create technology and infrastructure to replace natural water sources with manufactured water. This will lead to more investments in technology and water infrastructure, leading to higher water costs.

The challenge for humanity is to see if we can provide usable water to all the areas in the world or if we will have to adapt. We can no longer be fully depended on natural water sources and need other solutions.

Share your thoughts on this report and let me know if i missed anything.

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Water Report: Blue Gold (Part 1)