Building the Grid Behind the Grid: Water, Power, and AI Infrastructure

Every new data center announcement seems to spark anxiety as the public asks: Will this facility drain our aquifer, raise our electric bill, damage the environment, or all three? These concerns are understandable as infrastructure improvements and hyperscale computing go hand in hand. ESI is working with customers in this space and as they design and build these facilities, they are asking themselves how do we make these facilities more self-sufficient and sustainable?

ESI teams have hands-on experience across all three systems that determine whether a hyperscale campus becomes a community burden or a community-neutral neighbor: water management, power generation, and advanced technologies facilities. ESI understands how they fit together and where the industry is headed. The conversation around data centers is evolving as technology is being fielded to minimize their impact.

The water story isn’t what people assume

The loudest public fear about data centers is water. It’s also the piece of the story changing fastest. ESI’s work at a major Idaho semiconductor fabrication campus includes a zero liquid discharge facility that processes wastewater, fully separates it into its components — reclaimed oxygen and hydrogen, recovered solvents, a solid organic byproduct — and cycles it back into the fabrication process rather than releasing it out to the environment.

That approach mirrors a broader industry shift. Water-related legislation aimed at data centers has surged in the past two years, with dozens of state bills introduced in 2025 and 2026 alone, several of them mandating closed-loop systems that produce zero net water withdrawal and zero net wastewater discharge. Major cloud operators have followed the same logic: Microsoft’s newest cooling design is projected to “avoid the need for more than 125 million liters of water per year at each data center where it’s deployed, and closed-loop retrofits industry-wide are estimated to cut freshwater consumption by as much as 70% compared to traditional evaporative cooling.

The public conversation about “data centers draining the town well” is largely catching up to a design shift that’s already underway.

Power is the harder problem (and the more interesting one)

Water is a short-term, solvable engineering problem. Power is a longer game. AI-scale data centers are now routinely requesting 40, 80, even 100+ megawatts of continuous draw. These loads rival small cities that most regional grids were never built to deliver on short notice. Interconnection queues have swelled and approval timelines now stretch to five years or more, pushing developers toward generating power behind the meter instead of waiting on the utility.

Nuclear energy through small modular reactors (SMRs) may be a solution, and for good reason: standardized, factory-built units can be sited directly on a campus, sidestepping both the multi-year wait for new transmission lines and the cost of building them. Since a single hyperscale facility’s power draw can exceed the electricity use of an entire neighboring city, emplacing one or two on-site reactors largely resolves the transmission problem, eliminating excess burden on the existing grid.

That stated, commercial-scale SMR deployment is still early and in the testing phase. Factory-built nuclear hasn’t yet proven cost and schedule advantages and some energy analysts caution that a single small modular reactor would not go very far in meeting the enormous electricity needs of AI data centers at the pace that the demand is growing. It’s an important consideration as tech innovators continue improving the capability, but it doesn’t undercut the industry’s direction towards sustainability: on-site generation, nuclear or otherwise, is becoming standard practice.

Energy innovation has to start somewhere

ESI and its affiliates are contributing to this effort as the future of energy production takes shape. Before a small modular reactor generates a single watt for a future data center, someone has to build the facility that allows it to be tested, licensed, and eventually manufactured at scale. At Idaho National Laboratory, ESI’s sister company Estech recently rehabilitated a 1960s-era domed containment structure, which is now being used to achieve criticality and test new nuclear technologies.

The project team reinforced concrete, upgraded access points, replaced a 40-ton crane in a very tight space, upgraded key systems, and installed controls, all on an accelerated timeline while working to exacting Department of Energy specifications. This was one of the most unique challenges in the construction industry, but the team delivered a successful facility that is already producing results. As SMRs move from testing to commercial deployment, the specialized knowledge used to improve nuclear infrastructure can be used to eliminate critical production bottlenecks that have slowed energy innovation in the past.

The message the public hasn’t heard yet

The gap between public perception and where advanced infrastructure is actually going is wide. Communities worry, reasonably, about a new facility competing for scarce water and power resources and the industry takes those concerns seriously. That’s why the industry and companies like ESI are building toward closed-loop water systems that return more than they take, and on-site power generation designed specifically so growth doesn’t have to come at the grid’s or the watershed’s expense. The engineering and innovation in the energy sector are backing up this commitment. The resulting technological advancements will end up being as important to the AI infrastructure buildout as the concrete and steel structures themselves. ESI is excited to build the systems and facilities powering the new economy while preserving the communities that host them.