Presumably it evaporates and returns to the water cycle? I don’t know, but it’s not like growing tomatoes and exporting the water within them. That water is staying local. But that doesn’t mean it returns to where it’s needed, when it’s needed. They’re putting a strain on the local water supply (flow) not necessarily the long-term stock.
In 2022, a document from the West Des Moines Water Works said it and the city government “will only consider future data center projects” from Microsoft if those projects can “demonstrate and implement technology to significantly reduce peak water usage from the current levels” to preserve the water supply for residential and other commercial needs.