Closed-loop cooling keeps the same water moving in a sealed circuit instead of evaporating it. It is one of the clearest ways to cut a data center’s water use, and it comes with trade-offs.
How it works
In a closed loop, water or fluid circulates between the servers and chillers and is not evaporated. Microsoft says that since August 2024 all of its new datacenter designs use chip level cooling in a closed loop, with water filled once at construction.
The savings claim
Microsoft estimates this design avoids more than 125 million liters of water per datacenter each year. That figure is an estimate with a footnote, not a measurement. Pilots in Phoenix and Mt. Pleasant, Wisconsin were planned for 2026, with new sites expected in late 2027.
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The energy trade-off
Replacing evaporative cooling with mechanical cooling raises power use. Microsoft says warmer operating temperatures and economizing chillers offset most of it, leaving a nominal increase in fleet energy. That is the company’s own view.
What zero water really means
Zero water refers to cooling only. Restrooms and kitchens still use water. Dry cooling can also shift water use to the power plant that makes the electricity.
What this means for site selection
Where water is scarce, closed loop is worth a hard look. Where power is cheap and clean, the small energy penalty may be easy to accept. The right answer depends on the local grid and the local water supply together.
Ask the designer to show the water use and the energy use side by side, so the trade-off is visible.
The takeaway
Closed loop is a strong design choice where water is scarce. It works best when paired with efficient cooling and clean power.
Every figure in this article comes from the sources listed below, and where a number is company reported we say so. Our Eco Tools page has a water estimator you can use to compare cooling choices. If you spot a mistake, tell us and we will fix it.
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Submit your companySources: Microsoft datacenter cooling; Google on cooling and water. Figures marked as company reported come from the company itself.
