if all these bozo's really believe they can run an orbital datacenter, then running a datacenter on Earth with a closed cycle water loop is child's play.
Which also explains why the "data centers in space" is dumb. They don't need to use water cooling. They want to use it because it's cheap. It's also not clear that using closed water loop is actually solving the actual problem. Closed loop cooling increases power demand which is a different way of externalizing costs.
The problem with these data centers is not that they are water cooled, it's that they are absolutely massive industrial facilities being placed in areas that were never built to support that sort of capacity, and they are trying to do it by yesterday. That doesn't leave time for normal infrastructure build-out. Also these data centers need massive construction teams for 6 months but once built basically need 2 security guards and someone to check the mail. So it doesn't come with population or job growth, or any of the other services that would normally accompany development and that would provide a sustainable city.
Water shortages are mostly the symptom. And moving away from water usage is at best a bandaid and at worst makes the problem worse. i.e., if the extra energy needed for closed loop cooling comes from fossil fuel plants, that can use more water than the data center avoided.