At the Spring 2025 Interfaith Center on Corporate Responsibility (ICCR) conference in New York City, NorthStar Asset Management, Inc. hosted the panel discussion “Deep Dive into AI’s Thirsty Growth.” The conversation was led by Whitney Nguyen, CFA, NorthStar’s Director of Impact Research, alongside experts Shaolei Ren, Associate Professor at UC Riverside and lead author of the widely cited study, "Making AI Less “Thirsty”: Uncovering and Addressing the Secret Water Footprint of AI Models" and Michelle Katz, Director of Investor Engagement for the Ceres, Inc. Water Program, which drives corporate action on water risk through Ceres Valuing Water Finance Initiative, a global investor-led effort aimed at engaging companies with large water footprints to value and act on water as a financial risk. The OECD recently warned, “The world faces a growing water disaster. For the first time in human history, the hydrological cycle is out of balance, undermining an equitable and sustainable future for all.” Since 2015, the water crisis has consistently ranked among the top five global risks by the World Economic Forum. At the same time, we’re seeing explosive growth in AI—often celebrated as a solution to society’s toughest challenges, yet comes with a hidden cost—its training and operations require vast amounts of water to cool the data centers that power it. To put this into perspective, Microsoft used approximately 700,000 liters of water just to train GPT-3. With 20% of U.S. data centers located in drought-prone regions, the rapid expansion of AI is exacerbating local water shortages in already vulnerable communities. NorthStar has been engaging our tech companies on their responsible water use to safeguard community water supplies in response to AI demand. Look out for our white paper on this issue area this spring! #AI #SustainableTech #WaterCrisis #ResponsibleInvesting #ClimateRisk #ESG #ImpactInvesting #ShareholderAdvocacy #DataCenters #SustainableFinance #WaterStewardship #ICCR #Ceres #TechResponsibility
