Tech Companies Turn to Chemical Cooling to Solve AI Water Needs
San Jose, Saturday, 19 September 2026.
AI data centers are adopting fluorinated liquids to cut cooling energy by 90%, but regulators warn these persistent chemicals risk long-term environmental contamination despite closed-loop designs.
Tech Companies Turn to Chemical Cooling to Solve AI Water Needs
Artificial intelligence data centers are increasingly adopting fluorinated cooling liquids to reduce energy consumption by over 90% compared to air cooling, though regulators warn these persistent chemicals pose long-term environmental contamination risks despite closed-loop system designs [1][2]. While the shift helps operators reduce severe municipal water consumption, environmental groups and regulators warn that increased reliance on persistent per- and polyfluoroalkyl substances (PFAS) introduces significant long-term legal, ESG, and regulatory liabilities for tech infrastructure investors [1]. In 2023, US data centers consumed 176 terawatt-hours of electricity, representing 4.4% of national consumption, with projections estimating an increase to 6.7%–12% by 2028 [1]. A 2024 Lawrence Berkeley National Laboratory report found US data centers consumed 66 billion litres of water on-site in 2023, with hyperscale and colocation facilities comprising 84% of usage [1].
Tech Companies Turn to Chemical Cooling to Solve AI Water Needs
The power generation required for these facilities incurred a hidden water footprint of nearly 800 billion litres in 2023 [1]. Industry proponents argue that PFAS-based liquid immersion cooling systems significantly improve efficiency and reduce water consumption compared to traditional approaches [2]. However, environmental critics warn of the risks posed by potential leaks from these systems, as no closed-loop system is 100% sealed [2]. Kyle Doudrick, an environmental engineering professor at the University of Notre Dame, noted that while systems are closed, nothing is 100 percent sealed and chemicals can leak out over time [2].
Industry Expansion and Corporate Responses
Major PFAS producers are expanding capacity to meet AI, semiconductor, and lithium-ion battery demand, with Chemours, Daikin, and Arkema identified as key investors in these fluorinated products [1]. ChemSec estimates 50%–66% of Chemours’ $5.8 billion annual revenue is tied to PFAS, representing between 2.9 billion and 3.828 billion annually [1]. Daikin plans to triple production capacity for certain fluoropolymers to accommodate the surge [1]. Chemours launched two new Opteon refrigerants for stationary chillers in August 2026, targeting increased cooling demands from AI infrastructure [1].
Industry Expansion and Corporate Responses
Inquiries conducted regarding PFAS usage in cooling revealed that Apple and Google do not use these chemicals in their data center cooling processes, while Amazon stated it does not use liquid immersion cooling [2]. Oracle, Meta, and Microsoft did not respond to requests for comment regarding their specific use of PFAS in data center cooling systems [2]. The American Chemistry Council stated that as AI workloads increase the heat generated by servers and semiconductors, some data centers are exploring liquid-based cooling systems [2]. They added that these technologies can help improve cooling efficiency and, in some cases, significantly reduce water use associated with traditional cooling approaches [2].
Regulatory Scrutiny and EPA Actions
In July 2026, 17 environmental organizations petitioned the US Environmental Protection Agency (EPA) to reject Chemours’ application for Opteon 2P50, citing risks of fluid leakage and contamination [1]. The EPA is currently considering the approval of several new PFAS chemicals for industrial use, including Opteon 2P50, which is intended for use as a dielectric fluid in electric equipment cooling [2]. Chemours claims its Opteon immersion technology reduces cooling-energy consumption by greater than 90% compared to air cooling and essentially eliminates water use via a closed-loop system [1]. Jess Loizeaux, a spokesperson for Chemours, stated Opteon 2P50 is a more efficient and sustainable cooling solution that can help data centers reduce cooling energy use by up to 90% [2].
Regulatory Scrutiny and EPA Actions
In 2025, the EPA initiated a policy to fast-track the approval process for new chemicals intended for data center use, though the agency states the risk assessment process remains unchanged [2]. Fewer than 10 chemicals have been fast-tracked to date, including one PFAS [2]. The EPA is currently evaluating additional PFAS for approval, confirming that all six chemicals in its April/May 2026 docket containing fluoro in their names are PFAS [2]. An EPA spokesperson noted in an unsigned statement that PFAS have been approved under every administration since 2016 [2].
Environmental Impact and Alternatives
PFAS are estimated to be present in the bloodstream of nearly every American and found in 83 percent of U.S. waterways [2]. A 2024 study on semiconductor photolithography found that approximately 47 percent of PFAS used in the process enter wastewater, while a large subset is incinerated [2]. Commercial, PFAS-free alternatives and natural refrigerants already exist for cooling AI technology, according to ChemSec [5]. Data center cooling systems increasingly utilize natural refrigerants to avoid PFAS contamination, which is irreversible once released into soil and water [5].
Environmental Impact and Alternatives
Advansor, a Spanish data center, implemented CO2-based cooling systems, cited as one of the first globally to adopt this technology [5]. Fenagy in Finland utilizes hydrocarbon heat pumps in data centers capable of recovering waste heat sufficient to warm approximately 3,500 homes [5]. The ATMO report provides detailed analysis on industry-wide adoption of natural-refrigerant engineering, which is currently viable at commercial scale [5]. Marc Chasserot of ATMOsphere stated there is still time to put this toxic genie back in its bottle and noted that PFAS-free cooling is far and away the most used method [5].
Investment and Liability Outlook
Three strategic pillars identified to decouple AI growth from environmental damage include powering new capacity with clean energy, reusing waste heat for residential heating, and prioritizing natural-refrigerant cooling technologies [5]. Jonathan Kalmuss-Katz, a senior attorney with Earthjustice, warned that current PFAS problems will not be fixed if more new PFAS are continuously approved [2]. The Semiconductor Industry Association reported in June 2026 that leading AI data centers may contain an estimated 45 million chips each, with production demand for PFAS scaling alongside chip manufacturing volume [2]. Investors face potential long-term liabilities as environmental groups emphasize that once PFAS is in water and soil, there is no realistic way to clean it up [5].