The aridity of Ulaan Chab is the most striking feature of this region, the closest pastoral steppe area to Beijing. Elders in the area recall that "a drought occurs nine years out of ten, every spring." Water disappears quickly under the blazing sun and violent winds of the steppe. In 2022, a summer drought followed a spring drought, two episodes within a single year. In June 2023, a severe drought compromised the water supply of hundreds of thousands of livestock, and nearly 10,000 people were temporarily deprived of running water. Despite this, immense data centers have been established in Ulaan Chab, with 89 agreements signed with companies including Huawei, Alibaba, Kuaishou, Tencent, Baidu, ByteDance, and DeepSeek, which recently completed a funding round exceeding 50 billion yuan (6.4 billion euros). A large data center using evaporative cooling can consume up to several million liters of water per day in summer, equivalent to the annual consumption of a city with 30,000 to 40,000 residents. While the threat of no longer being able to fill the troughs for their animals looms over the herders, the cooling towers of the server rooms operate day and night. According to an article published by The Guardian in June 2026, out of the 809 data centers to be built in the United States, 517 will be located in regions that have experienced long periods of drought. A data center is essentially a massive heat factory. When tens of thousands of high-performance graphics processors run at full capacity, it is necessary to dissipate a thermal load comparable to that of a steel mill oven, otherwise the performance of the chips will drop sharply and cause large-scale outages. From a technical perspective, the most proven and least costly method for reducing cooling costs is "evaporative cooling," which involves spraying water onto heat pipes to dissipate heat through evaporation. The principle is the same as when you spray water on a scorching concrete floor in summer to cool it down. Thus, drought and extreme cold constitute the "free air conditioning" ideal for data centers. These considerations have led investors to choose Ulaan Chab. This capital of computing power indeed has three major advantages. First advantage: cold. Thanks to its annual average temperature of only 4.3 °C and low humidity in summer, it is possible to leave the evaporative cooling compressors idle more than 70% of the time, and the electricity consumption for heat dissipation is reduced by 30%. Second advantage: cheap electricity. Here, the electricity price at the meter is only 0.25-0.35 yuan per kilowatt-hour, much less than in the east of the country. Moreover, the network latency is only 4.2 milliseconds to Beijing. Finally, the site has a plethora of land resources. Ulaan Chab covers a total area of 54,500 km², with a permanent population of less than 1.7 million people, a density that barely exceeds 30 people per square kilometer. It is possible to acquire land at an extremely low cost on the vast expanses of the Gobi Desert. By the end of 2025, 84 implementation projects had been signed in the region, with a total investment exceeding 500 billion yuan (64 billion euros). However, other figures, less shining, never appear in the presentation brochures of Ulaan Chab aimed at investors. Indeed, the city's per capita water resources amount to only 484 m³, less than a quarter of the national average. After being classified as an area of groundwater over-exploitation, the central right banner of Chahar [an administrative subdivision inherited from Mongolian tradition and now under the jurisdiction of Ulaan Chab] has been ordered to remedy this. In the Shangdu district, since 2020, 2,008 wells equipped with electric pumps have been ordered to close, which has prevented the extraction of about 20 million cubic meters of groundwater per year. Considering these limited water resources, it is natural that the presence of water-hungry data centers will eventually become a source of tension. In March last year, the water management office of the Inner Mongolia Autonomous Region launched a special campaign against illegal water withdrawals. In April, officials from various banners and districts of Ulaan Chab held meetings where they estimated that the most serious issue to be addressed first was "unauthorized water withdrawals by industrial enterprises and non-compliant new withdrawals in over-exploited groundwater areas." In July, a compliance request was sent to a series of violators. How much water do data centers consume? It is a trade secret. Is access to water a deep rivalry between data centers and herders? Yes. And yet, it must be noted that the question has never really been put on the table. From mediocre to ridiculous In official statistics, there is practically no indication of data center water consumption. To find out more, it is necessary to delve into the ESG [Environmental, Social, and Governance] reports of major companies, even if the topic of water is reduced to a minimal extent. Thus, in Tencent's 2025 ESG report [the giant that owns WeChat], a significant place is given to progress in carbon neutrality and the share of green electricity, which has made a spectacular leap to reach 82.9%. The table of key performance indicators does include a line indicating that total water consumption in 2025 exceeded 12 million cubic meters, but it is unknown what share of this water comes from groundwater in drought-affected regions, due to a lack of geographic breakdown. One only has a total. On the other hand, Kuaishou [which edits a short video application] announces that it has succeeded in reducing the energy efficiency indicator (PUE) of its Ulaan Chab data center to less than 1.2, a data center that uses 93% green electricity. These are rather flattering figures... However, the section devoted to water resource management highlights only two positive points: the use of recycled water at the headquarters in Beijing, and the construction of a rainwater collection pond in Ulaan Chab. However, a single rainwater collection pond for a water consumption of around 10 million cubic meters seems rather ridiculous. Alibaba's ESG report is a bit more detailed. The PUE of its data centers has dropped to 1.187. However, if one examines more precisely the efficiency of its water resource use (WUE), the water impact of the infrastructure appears nine times higher in evaporative cooling mode (1.799 liters per degree) than in air cooling mode (0.205 liters per degree). In other words, in a data center, switching to evaporative cooling in order to save electricity leads to a significant increase in water consumption. In 2025, new standards on the use of resources in data centers came into effect. This regulation specifies that a WUE between 1.2 and 2.0 corresponds to category 3 - mediocre. With 1.799, Alibaba is indeed in this category. Let us finally look at the case of Huawei, the first company to establish itself in Ulaan Chab, as early as 2013. As the company is not listed on the stock exchange, it is not required to publish an annual sustainability report. As a result, this giant of the sector has long kept its water consumption data out of the public eye. A resource unlike any other The issue of water resources is indeed very different from that of electricity. If electricity runs short, one can always build power plants, install photovoltaic panels, or set up high-voltage lines to transport it from one region to another. With water, it is impossible. In Ulaan Chab, the annual average precipitation is less than 400 millimeters, with an evaporation rate of 2,000 millimeters. The only available water source comes from groundwater, but the water does not flow like from a tap; it is an ecological capital that has been formed over thousands, or even tens of thousands, of years through gradual infiltration. No matter how many administrative formalities are respected, once these resources are exhausted, they cannot be exploited. This also means that water supply is conditional on a specific location, unlike electricity, which can come from afar. Once pumped, the water of a village is definitively gone and cannot be compensated for by water brought from elsewhere. In the event of a severe drought in the future, the herders will be justified in asking why the foreign data centers in the region can benefit from a stable water supply, while they, the local residents, are forced to conserve this resource and close their ancestral wells. What does the law say? In reality, the answer to this question is already in the law. Article 21 of China's Water Law clearly stipulates that "the exploitation and use of water resources aim first and foremost to meet the drinking water needs of the inhabitants of urban and rural areas, while also taking into account the needs of agriculture, industry, the ecosystem, and navigation." The legislator emphasizes this point in the following paragraph: "In arid and semi-arid regions, it is necessary to take into account the water needs of the surrounding environments before any exploitation and use of water resources." Thus, the law clearly establishes the priorities. However, in practice, the investments and tax revenues generated by a 1 gigawatt data center weigh much more heavily in the balance than the herds of a few thousand herders. The 89 data center projects in Ulaan Chab are today largely out of the ground, offering increasingly larger computing powers, and the plans for DeepSeek's park, of the order of a gigawatt, are gradually emerging. At the same time, the authorities have just made public the first cases of violations identified in the framework of their campaign against illegal water withdrawals in Ulaan Chab. In these villages where the groundwater level is declining year by year, the herders have no idea what WUE is, do not understand the beautifully designed ESG reports, and do not care to know how many hundreds of millions of parameters a large language model has. They simply notice that they have to dig deeper and deeper to get water in their wells. And that, gradually, inevitably, their herds are growing thinner.