Microsoft has announced the launch of a new data center design with zero water cooling technology that optimizes AI workloads and enables zero cooling water consumption, enabling precise temperature control without water evaporation through a chip-scale cooling solution designed to protect local watersheds and respond to water stress. Microsoft says its current fleet will still use a mix of air-cooled and water-cooled systems, but new projects in Phoenix, Arizona, and Mount Pleasant, Wisconsin, will pilot zero-water evaporation designs in 2026.