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That AI consumes it at an abnormally high rate, presumably.

The claim never made sense to me either, I can only assume those that regurgitated such claims never worked with HPC or even general datacenters before.

Was recently talking to a (non-technical) friend about this, she was surprised after talking about the "insane water use for AI datacenters" when I responded that open-loop cooling is pretty rare for a datacenter and I've never actually seen it used before, versus closed-loop (or just regular air-based cooling) which has no real noticable water consumption.

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It was never that dramatic, and it’s declining day by day. It’s a panic over a real but small problem.

Order of magnitude more water is lost from wasted irrigation (e.g. during rain, of fallow fields, sprayed into windy air, etc) than data centers.

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Problem with data centers is that companies want to build them near densely populated areas that already have problems with water supply and high utility bills.
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1. They don't HAVE to use water. Air cooling, closed loop cooling, waste-water cooling, and so on, are options. Easy to regulate. Evaporative cooling is more energy efficient though, but a complete non-issue in places with abundant water and a non-option elsewhere.

2. Datacenters have been shown to reduce utility prices. They provide suppliers with previsible long term demand which allows for cost-effective network and production planning.

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That AI data centers are drinking up local ground water for cooling. It isn't (or wasn't) nonsense, though. It was/is a real thing, though it seems to be on the out in favor of closed loop cooling after the massive and still on-going public outcry.
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The outcry over data centers using a fraction of the water used for things like golf courses or growing alfalfa in a desert.
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