The scarcity of water is emerging as a global economic threat. With China and India looking the most impacted
Women fill water from a municipal tank on May 26, 2023 in the Peth Taluka village in India.
Ritesh Shukla | Getty Images News | Getty Images
Water scarcity is seen as the most significant and potentially most impactful component of the wider climate crisis, and researchers say that large Asian economies like India and China will be the most affected from these water shortages.
Asia is an industrialization hub that is experiencing the most rapid rates of urbanization, and this would require a copious amount of water, Arunabha Ghosh, the CEO of the Council on Energy, Environment and Water, told CNBC on the sidelines of Singapore’s annual Ecosperity Week last Tuesday.
“It’s not just the old industries like steel making, but newer ones like manufacturing semiconductor chips and the transition to clean energy that are going to require a lot of water,” Ghosh said. “Asia is the growth engine of the world, and these industries are new drivers for its economic growth.”
Global fresh water demand is expected to outstrip supply by 40% to 50% by 2030. Ghosh warned that water scarcity must not be viewed as a sectoral issue, but one that “transcends the entire economy.”
Asian economies “must understand that it is a regional common good and it is in their own interest to mitigate the risks that come their way in order to prevent the economic shocks that severe water scarcity will impose,” he said.
India, now the world’s most populous nation, will be the hardest hit from water scarcity. Despite holding 18% of the world’s population, it only has enough water resources for 4% of its people, hence making it the world’s most water-stressed country, the World Bank said.
The South Asian nation relies tremendously on its monsoon season to meet its water demands, but climate change has caused more floods and droughts to hit the country, and has exacerbated its water shortage.
China is in the same rocky boat
According to independent think tank the Lowy Institute, approximately 80% to 90% of China’s groundwater is unfit for consumption, while half of its aquifers are too polluted to be used for industry and farming. Fifty-percent of its river water is also unfit for drinking, and half of that is not safe for agriculture as well.
Although the world’s second-largest economy has made progress in its transition toward clean energy, its power system remains largely dependent on coal. And if there is no water, there will be no coal.
“Water is an essential input for the generation of coal power plants, and if water becomes scarcer or is not available for power generation, that plant becomes ineffective,” Ghosh highlighted.
Other developing countries in the region are in similar situations, but their water crises could be harder to solve. Countries like the Philippines are not as privileged and resilient, so there’s a “huge imbalance in the water crisis that we’re facing,” Shanshan Wang, a Singapore water business leader at sustainability consultancy Arup, said.
A villager drives a herd of sheep on the exposed bed of a reservoir on May 25, 2023 in Kunming, Yunnan Province of China.
Vcg | Visual China Group | Getty Images
India and China are close to seas and rivers, and are more threatened by rising sea levels, but they can afford technology and innovation for better water storage systems, Wang told CNBC on the sidelines of the Singapore International Water Week last Tuesday.
Meanwhile, Wayne Middleton, the Australasian water business leader for Arup said that “we need to stick our hand up and say that we have not recognized the value of our river systems and we have exploited them for industry uses and agriculture.” “We have only recently seen the damage that we have done,” he said.
Countries in the West won’t likely remain unscathed by the risks associated with this water crisis. Europe’s water problem is expected to get worse as resources grow increasingly scarce due to the deepening climate emergency. The region saw temperatures go through the roof in spring, after experiencing a winter heatwave that took a toll on its rivers and ski slopes.
Sectors most affected
Taiwan, home to Asia’s largest semiconductor industry, has once again succumbed to water shortages less than two years after battling the worst drought it had seen in a century. Huge amounts of water are needed to power the plants and manufacture the semiconductor chips that go into our digital devices, and supply can be hindered if shortages occur.
“Taiwan is a big user of hydropower and it always faces a dilemma on whether to store water for its semiconductor industry to utilize, or if the water should be released so they can have more hydroelectricity power,” Wang highlighted.
“Droughts and floods are both a problem for Taiwan, so the industry is unlucky and vulnerable,” she added.
However, Wang noted that although many manufacturing industries do need water to function, water is not actually being used up and could be recycled.
“Water scarcity is not particularly problematic to these industries because a lot of the water can be recycled. The process pollutes the water, and many industries might just want to dump the water directly back into the ecosystem instead of purifying and reusing it,” she said.
“Now that there is a crisis, there are opportunities for businesses to think about how to close the loop … They cannot just take whatever is available in abundance for themselves.”
Water is also playing a huge role in the planned energy transition, and the lack of water could impede countries’ transition to net-zero. In 2022, China experienced its worst heatwave and drought in six decades. Blistering temperatures dried up areas of the Yangtze River, impeding its hydroelectricity capabilities — the country’s second biggest power source.
The Gezhouba dam water conservancy project of the Yangtze River after heavy rain in Yichang, Hubei Province, China.
Future Publishing | Future Publishing | Getty Images
To alleviate energy risks, the country approved the highest number of new coal-fired plants since 2015 last year. Beijing authorized 106 gigawatts of new coal power capacity in 2022, four times higher than a year earlier and the equivalent of 100 large-fired power plants.
“We need a big energy transition to renewables to power our new water supplies, and we need our water supplies to be available for energy security,” Middleton said. “We need to start bringing those two conversations together a lot more.”
Economies that are heavily dependent on agriculture could also see output drop significantly and food security would be at further risk.
According to Australia’s Department of Agriculture, Fisheries and Forestry, the value of agricultural production is expected to fall by 14% to reach $79 billion in 2023 to 2024. This is due to drier conditions that are expected to reduce crop yields from record levels in 2022 to 2023.
“We can certainly build new water supplies and provide water to industries, customers and cities in Australia, but we’re not really able to sustain enough water in longer periods of drought,” Arup’s Middleton pointed out.
“Of course we we have to make water available for our cities and our big economies and our communities, but it leaves behind a growing risk for food production and the agricultural sector,” he said.
Technology
Google investors have big expectations after stock’s sharpest quarterly rally in 20 years
Google CEO Sundar Pichai waves as he arrives to attend the Artificial Intelligence (AI) Action Summit at the Grand Palais in Paris, France, February 11, 2025.
Benoit Tessier | Reuters
Alphabet has a high bar to clear when it reports earnings Wednesday.
The company’s stock price soared 38% in the third quarter, its best quarterly performance in two decades. It’s continued to rally, climbing 11% so far in October, closing at a record on Monday.
With revenue growth stuck in the low teens of late, and expected to come in at 12% next year, investors have recalibrated their expectations after witnessing speedier growth in the years before the 2022 slowdown. Much of the recent optimism centers around Google’s improved position in the artificial intelligence race.
However, the biggest catalyst for the stock in the third quarter had more to do with Google’s relative weakness in AI, compared with its standing in online ads.
Alphabet vs. Nasdaq
Alphabet shares soared in early September, when Google avoided the worst-case scenario in its search antitrust case. Following the government’s victory in its case against the company last year, U.S. District Judge Amit Mehta ruled in the remedies decision last month that Google would not be forced to sell off its Chrome browser, but must share data with competitors.
Mehta said that the rise in AI services from companies like OpenAI has created plenty of new competition in search. Backing up his point, OpenAI last week unveiled ChatGPT Atlas, an AI-powered browser that could directly challenge Chrome.
While investors immediately cheered Mehta’s ruling, Google now has to show that it’s a force in AI, which is serving as the growth engine for the tech sector. Google’s cloud unit benefits from the AI boom as companies count on the technology for running large language models and expanding workloads. And Google is heavily investing in Gemini, its family of AI models, products and services.
Over the weekend, analysts at KeyBanc Capital Markets raised their price target on Alphabet to $300 from $265, expecting that third-quarter results will “show that faster product velocity is driving momentum in Search, Cloud and Waymo,” its autonomous vehicle business.
The stock pop, the analysts wrote, is due to “a combination of the DOJ Search remedies trial being more favorable than expected and more signs of progress in AI across business units.”
Alphabet is scheduled to report results after the bell on Wednesday, alongside rivals Microsoft and Meta. Apple and Amazon report the following day.
Wall Street is expecting to see revenue growth of 13% to $99.89 billion and earnings per share of $2.26, according to LSEG.
‘The bite isn’t fatal’
When it comes to Google’s position in AI, some analysts see reasons for concern.
Bernstein analysts wrote last month after the remedies decision that Mehta’s comments about generative AI competing with search may be a red flag for investors.
“The bite isn’t fatal but it still stings,” wrote the analysts, who have the equivalent of a hold rating on Alphabet.
Mehta dedicated roughly 30 pages of the 226-page filing to explaining generative AI and the market as it exists today. He described the space as “highly competitive” and wrote that there have been “numerous new market entrants” with access to “a lot of capital.”
ChatGPT accounts for about 81% of the global AI chatbot market, according to September data from StatCounter. Perplexity is second at 11%, followed by Microsoft Copilot at 4.1% and Gemini at 2.8%, the firm said.
But Google is aggressively pushing Gemini as far more than just a ChatGPT competitor, and is taking advantage of its strength in various markets for distribution.
Earlier this month, the company launched Gemini Enterprise, targeting corporate clients with agents that perform specific work tasks. In September, Google announced it was rolling out Gemini in Chrome to Mac and Windows users in the U.S. as well as to mobile devices, allowing users to ask Gemini for help understanding the contents of a particular web page, work across tabs, or do more within a single tab, such as schedule a meeting or search for a YouTube video.
Google CEO Sundar Pichai said this month at Salesforce’s Dreamforce conference that Gemini 3, the latest version of the company’s AI model, will be released this year.
Analysts at Mizuho said in a report about the internet market last week that “competitive risks from OpenAI across the internet landscape, particularly at Google, have been topic #1” in more than 100 recent conversations with investors.
Still, they said that they see “competitive fears likely to recede as we refocus on fundamentals with earnings.” For Google, the “imminent roll-out of Gemini 3 could further tilt the sentiment for Alphabet shares toward AI-winner, at least near term,” they wrote.
Even as the remedies resolution was generally welcomed by investors, the company will have to make some concessions, according to the judge’s ruling. Most notably, Google has to make available certain search data and user data to its “qualified competitors.”
Determining which companies fall into that category will be the job of a technical oversight committee at a date that hasn’t yet been announced.
Services like DuckDuckGo and Microsoft Bing may be among the beneficiaries, potentially receiving improved access to some of Google’s search index data under specific licensing arrangements.
Mehta wrote that the data-sharing remedies “can help to close the sizeable advantage Google has in answering long-tail queries, thereby improving product quality and attractiveness to new users.”
Baird analysts wrote that they expect a “modest” impact to Google, because the company doesn’t have to share its data with generative AI competitors like Perplexity and OpenAI. That would have been “more problematic,” the Baird analysts wrote.
Google, which plans to appeal the ruling, declined to comment, but pointed to an earlier blog post on the judge’s decision.
“We have concerns about how these requirements will impact our users and their privacy, and we’re reviewing the decision closely,” the company wrote.
Abiel Garcia, a former deputy attorney general for the California Department of Justice, working in antitrust, said he doesn’t see the ruling having an impact on the way Google operates.
“Maybe some of the data will help competitors’ products at the periphery, but I don’t think this is going to really shift anything,” Garcia, who’s now a partner at Kesselman, Brantly & Stockinge, told CNBC. “It almost encourages Google’s roll-the-dice behavior.”
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., wears a pair of Meta Oakley Vanguard AI glasses during the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 17, 2025.
David Paul Morris | Bloomberg | Getty Images
Meta’s AI app has seen a major jolt in downloads since launching its Vibes feed of AI-generated videos, giving investors a glimpse of the company’s artificial intelligence strategy ahead of Wednesday’s third-quarter earnings.
Since releasing Vibes on Sept. 25, the Meta AI app’s downloads on both iOS and Android are up 56% month-to-month to a total of 3.9 million downloads as of Oct. 18, according to data provided to CNBC by mobile research firm Appfigures.
“That’s what I’d call standout growth,” said Appfigures Head of Insights Randy Nelson, adding that “the month’s not even over.”
Still, OpenAI’s rival Sora app, which launched Sept. 30, appears to have more momentum despite only being available on Apple’s iOS platform and requiring an invitation for use. From Sept. 30 through Oct. 18, Sora saw 2.6 million downloads on iOS, compared to the 1.1 million downloads of the Meta AI app, according to Appfigures.
Sora’s early popularity isn’t surprising to nearly a dozen creators, marketers and brand agencies that spoke with CNBC about about their interest and use of the AI tools.
Meta declined to comment.
Creators and marketers say they generally find Sora easier to use. Among the key distinctions is Sora’s capability of producing more realistic looking videos that show people talking, while Vibes only lets users choose select songs as accompanying audio.
The Vibes feed is filled with surreal, playful content, ranging from four lions sharing a pizza in the jungle to a hedgehog singing karaoke.
Meta has been paying creators to produce AI-generated videos for Vibes as a way to boost the visibility of the app, according to people with knowledge of the matter. Meta has sought out influencers who specialize in generative AI tools provided by the startup Midjourney, and is requiring them to sign non-disclosure agreements, according to the people, who asked not to be named because they weren’t authorized to comment on the matter.
Meta’s evolving AI strategy
The Facebook parent debuted the Meta AI app in late April, confirming an earlier CNBC report. The app was originally called Meta View and was used by owners of the Ray-Ban Meta AI glasses to manage their device settings, import photos and perform other utility functions.
The app, which is still used to manage Ray-Ban Meta glasses, was relaunched as Meta AI to serve as the company’s hub for users to interact with the social media firm’s ChatGPT-like AI assistant, but the September launch of Vibes added a video feed component similar to that of TikTok. The key difference is that all of the content found on the Vibes feed has been created entirely by AI generators.
Unlike Sora, which is powered by OpenAI’s proprietary model, Meta AI’s Vibes feature relies on models provided by third parties like Midjourney and Black Forest Labs, according to a Threads post last month from Alexandr Wang, Meta’s chief AI officer and the former CEO of Scale AI. Meta is also developing its own internal generative AI technology, Wang wrote.
Meta’s reliance on third-party AI models to power Vibes underscores the company’s newfound willingness to seek outside help as it tries to get its AI technology back on track. The underwhelming launch of Llama 4 in April spurred CEO Mark Zuckerberg into spending billions of dollars to shake up Meta’s AI organization and install new leaders like Wang, CNBC previously reported.
That overhaul continued last week, when Meta laid off 600 employees in its AI organization. The company spared Wang’s core TBD Labs group, which now overseas touchstone AI efforts like Llama.
Meta’s AI strategy is sure to be a major topic in the company’s third-quarter earnings report and investor call on Wednesday. For the quarter, analysts expect revenue growth of 22% from a year earlier to $49.4 billion, according to LSEG. Wall Street expects revenue growth for the full year of 19% to $196.2 million.
Meta Vibes
Cfoto | Future Publishing | Getty Images
Some of the influencers that Meta is paying to populate Vibes are based in India, where Sora is not yet available and TikTok is banned.
Company executives have previously said that Meta AI usage, largely accessed via the company’s WhatsApp service, is the highest India, the world’s most-populous country, even though not all influencers there get paid.
“One of the biggest reasons that got me excited is because I’ve been in the creator ecosystem for almost 15 years now,” said Gaurav Bisen, a creator from India who posts 10 to 15 times a day on Vibes but isn’t paid by Meta. “Creating content on Instagram, TikTok, YouTube takes a lot of time, energy and investment. But here, it’s so easy. You just type a prompt.”
Bisen said he’s found early traction on Vibes, where his following has grown to more than 25,000. He said he’s learned that short, animated dance clips perform best.
“People who didn’t have the confidence to come in front of a camera can now create from their imagination,” Bisen said. “You can produce creative content without even being in it.”
Still, engagement on Vibes remains limited compared to Instagram or TikTok. Most creators told CNBC that their posts average fewer than 10 likes and almost no comments.
Instead, Vibes users measure success through “remixes” – a feature that lets creators take an AI-generated video, edit the prompt and repost it as their own.
“Remixes kind of seem like the currency on the app,” said Dylan McIntyre, who runs the AI video account JunkBoxAI on Instagram, where he has more than 1.3 million followers but just 22,000 on Vibes. “People are liking what they’re seeing and want to make their own and repost it.”
Meta is leaning heavily into generative AI as it courts creators and competes with OpenAI. Its AI Studio tool lets users build customizable AI characters and chat with them across Messenger, Instagram and WhatsApp.
Investors will also be listening for commentary on the company’s Metaverse strategy.
Meta confirmed on Monday that Vishal Shah, who spent the past four years leading metaverse initiatives, is now helping run AI products as part of the company’s Superintelligence Labs division, which is led by recent high-profile hires, including former GitHub CEO Nat Friedman.
Shah, who will now report to Friedman, was previously a vice president of product at Instagram. The Financial Times first reported on Shah’s new position.
WATCH: Partnership with Meta for smart glasses helps lift EssilorLuxottica sales.
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