AI and water: An opportunity in plain sight?

The Artemis II astronauts took iconic photos from space, which reminded us of something important: we are a Blue Planet. Our connected lives are defined by water. And water is the theme that connects all the strands in this week’s email, from conflict in the Gulf to the expanding frontier of AI and data centres.

The UK’s economic future right now hangs on the fate of a contested stretch of water: the Strait of Hormuz. Even if a diplomatic solution is found between the US and Iran, an inevitable tsunami of economic turmoil is building on the horizon. This week, the governor of the Bank of England warned of a “major supply shock”. The IMF forecast that this will hit the UK hardest among the world’s advanced economies.

UK businesses are bracing themselves for the impact, which will, of course, hit consumer confidence and spending, as well as adding cost pressures throughout the economy.

Businesses of all sizes that I speak to are trying to stay positive by focusing on the things that they can control. The key one right now is AI adoption. The hope is that this technology can potentially provide a much-needed boost to our national economy. This can happen through operational efficiency savings, but also through the invention of whole new business models and routes to market.

Interestingly, accountancy firm PWC released a report this week that found a small group of companies is pulling sharply ahead in the race to generate real financial returns from artificial intelligence.

A survey of more than 1,200 senior executives found that nearly three‑quarters (74 per cent) of AI’s economic value is being captured by just one‑fifth (20 per cent) of organisations. There is an emerging gulf between “AI leaders” and the majority of businesses still “stuck in pilot mode”, it found. Some are still wondering what they should use, Microsoft CoPilot, Anthropic’s Claude or old favourite ChatGPT?

So how does this come back to water again? Bear with me.

I attended an event this week run by Veolia that shines a light on the opportunities and challenges of AI. Veolia is a company mainly known in the UK for its waste disposal services (you’ve probably seen its trucks and bins!)

In fact, the French company is a global behemoth that employs more than 215,000 people across five continents. Abroad, it is better known for managing complex environmental projects and water supply.

It is making a big play in the world of AI and tech, which might be why it chose the futuristic Outernet exhibition space in central London to announce its ambitions (pictured below).

Veolia’s global CEO Estelle Brachlianoff explained that her company is aiming for €1bn in annual revenue from data centres and chips by 2030. Why do they see an opportunity, with their expertise?

As we all know, if AI chatbots and agents are going to do their work, they need the compute power of data centres. Demand for these is expected to grow threefold by 2030. The UK government has been keen to talk up investment in these centres, which are now classified as critical infrastructure.

The pinch point has always been natural resources. Do we have enough electricity to power them and enough water to cool them, without depriving local communities? Can our public infrastructure handle it?

Billions of pounds-worth of AI projects are not happening globally, Brachlianoff pointed out, due to resource constraints, leading to moratoriums on data centre projects, or proposals being turned down.

Veolia estimates that: “By 2030, the overall water use of data centres and semiconductor manufacturing is expected to equal that of 46 million people, roughly the size of the New York, Los Angeles and Paris metropolitan areas combined.”

The business opportunity it sees is to make data centres more environmentally friendly by using its technology to turn the heat data centres generate into an energy supply for local areas. Also, by allowing data centres to use recycled water, rather than public drinking water.

Around 50 per cent of the cost basis of AI comes from water and energy consumption. Veolia is already using its technology at the Wellcome Genome Campus in Cambridgeshire, but it wants to go further. It works with 100 data facilities worldwide and aspires to turn them into carbon-neutral, “water-positive”, circular hubs.

Will Hewes of Amazon Web Services was at the event and explained how a centre in Mississippi will be switching entirely to recycled water by 2027, using water from treated sewage. It’s working with Veolia to reach the goal of returning more water to local communities than it consumes in its data centres, on a “water as a service” model. WaaS!

Even as we contemplate our exciting AI future, we can’t help but consider that fundamental element: water.

Our guest this week on the Business Leader podcast is proof that old rivals can become firm friends. Phil Bentley is the CEO of Mitie, a UK giant that employs around 90,000 people. While many refer to Mitie as “an outsourcing giant”, Bentley prefers to say “we're experts, not outsourcers”. It works in diverse areas like high street store security (for everyone from Lidl to Sainsbury’s) and facilities management for buildings. Its biggest client is the Ministry of Defence.

Bentley led British Gas’s retail operation from 2007. In this capacity, he almost became Richard Harpin’s boss when British Gas attempted to buy HomeServe. Harpin admits he played up the size of HomeServe at the time, including the number of vans it had, to ward off his suitor! (He held out and would go on to sell HomeServe for £4.1bn). The pair are now friends and can laugh about that period.

Interestingly, Mitie too has a stake in data centres, as part of its facilities management business. It builds data centres and manages them too. Bentley pointed out that the cost of energy is prohibitive in the UK, making centres more expensive to run than in France or Germany. Norway, he points out, incentivises them by providing energy for free.

But he agrees on sustainability as both important and as a business opportunity: “We need to repurpose the built environment for energy efficiency”.

You can listen to the podcast here.

Guess the company

• It was founded in San Francisco in 1969
• Its name is derived from the initials of the last names of its founders
• Its HQ is in Bonn, Germany
• It has 584,000 employees and serves over 220 countries and territories
• Revenue for this company in 2025 hit €82.8bn

You'll find the answer at the bottom of this page

What happened this week?

1. A surprise this morning as the UK economy grew more than expected in February. However, the Middle East conflict continues to raise concerns that growth may turn negative in the months ahead. GDP increased by 0.5 per cent in February, data from the Office for National Statistics showed. Growth for January was also upgraded to 0.1 per cent, having previously been estimated to be flat.
2. UK consumers have cut back on travel spending for the first time in five years, as they worry about the rising cost of living amid the Iran war. Overall consumer card spending increased 0.9 per cent year-on-year in March, down from February’s 1 per cent, according to data from Barclays. Travel spending fell by 3.3 per cent last month, the first decline recorded by the lender since March 2021.
3. Businesses slashed jobs at the fastest pace in 2026 as employers also resisted giving staff big pay increases over March, research has suggested. Research by the Recruitment and Employment Confederation and KPMG said there was a steeper rise in the number of job seekers over March. The rise in the availability of candidates was caused by higher numbers of redundancies and general job scarcity, according to researchers, leaving the UK jobs market exposed to damage from the war in Iran as the effects trickle through over the coming weeks.
4. A US trial lawyer who led a landmark case against Meta is set to advise the UK government, as ministers consider tougher action on the impact of social media platforms. Matthew Bergman, who represented a young claimant in a high-profile Los Angeles lawsuit, is expected to be consulted as part of ongoing discussions around online harms and platform regulation. The case centred on a 20-year-old woman who told the court she spent up to 16 hours a day on Instagram. In March, a jury found Meta 70 per cent liable and YouTube 30 per cent liable, awarding $6m in damages. While relatively small compared to the companies’ revenues, the ruling is seen as a significant legal precedent.
5. Amazon is aiming to build up its satellite business to offer internet and mobile phone services by spending $11.57bn (£8.5bn) on an acquisition of Globalstar. The deal will allow Amazon to get thousands of satellites into low-earth orbit through the Amazon Leo project, which the company has been working on for several years. Amazon said the Globalstar takeover fits its "long-term vision for space-based connectivity" and that it will deploy a "next generation" satellite system in 2028.

Weekend reading

💪 Why leaders need “power skills”

Many leaders today face a gap between their skills and the evolving demands of leadership. Mastery of soft skills, or power skills, is essential for sustained leadership success beyond technical expertise. Harvard Business Review explains three ways leaders can build these essential skills, from doing listening tours to reverse mentoring.

🎰 Betting on risk changes the world

An Alpine insurance analyst quietly convinces a room of sceptics that climate change is real. Not through ideology, but through pricing risk. From 17th-century coffee houses to today’s prediction markets, the business of betting on the future has long sharpened our understanding of it. This piece in the Financial Times explains that, while risk markets can be powerful tools for insight, they also carry hidden incentives that can reshape behaviour in costly and unexpected ways.

And finally

The 2026 Candidates chess tournament concludes today in Cyprus. It is a renowned, global chess competition organised by chess’s governing body, where the winner gets the chance to do battle with the reigning world champion.

But this year’s event has been rocked by some uncomfortable criticism by top players about the impact of AI.

Chess has been involved in artificial intelligence and machine learning for longer than most other human activities. That’s because for decades, early computers had their intelligence tested on games like chess (and others, like the Chinese game Go, which DeepMind trained on).

For many years now, so-called ‘chess engines’, like Stockfish, have been easily accessible for free online through browsers, telling you the optimal move to play at any given moment. It’s led to issues with cheating allegations when people play online rather than in person. Are they secretly consulting the engines, harnessing the power of AI?

But the same issue is affecting the so-called classical game, played in person, too, even though you can’t consult AI while playing. Some top grandmasters are starting to complain that AI is making chess boring and soulless. That’s because top players are using AI engines in their preparation and then memorising the optimal opening moves.

Chess champions like Magnus Carlsen and Vladimir Kramnik have argued that this has taken a lot of the creativity and human flair out of games: competitions have essentially become memorisation tests.

Will this development in chess be matched in other areas of human endeavour, from journalism to social media creation? There are already signs of concern about AI spoiling the very things that make us feel human.

Maybe a backlash will be on the horizon.

The answer to our question is DHL.