Data centers receive sharp criticism for their high water usage, but the impact on the broader water industry and for investors is also about infrastructure bottlenecks, regulation, and emerging technologies, among other things. Utilities companies must navigate significant changes when hyperscalers enter their territory—in some cases, a new data center operator may immediately become one of the largest customers in the region. All types of water infrastructure providers, from treatment plants to pipeline operators to storage and more, face new capacity challenges.
The landscape is shifting quickly as regulation struggles to catch up with new investments and new companies, and even geographies emerge as potential winners. For investors, one of the safer ways to approach the water industry in the time of AI is via exchange-traded funds (ETFs), which may help to distribute some of the risk and provide broader access to the sector. However, not all water ETFs are the same, and investors might start their search with proven winners like the funds below.
