It's not that the datacenters don't "use" water (you'll find plenty of sources confirming that), but rather that the argument stretches the concept of "water usage" well beyond the limit of meaninglessness. Water is not electricity, it can't usually be transported very far and the impact of a pumping operation is fundamentally location-dependent. Saying "X million litres of water used for Y" is usually not useful unless you're defining the local geographic context.

Pumping aquifers in a dry area and discharging the water in a field: very bad.

Pumping from and subsequently releasing water to a lake/river: mostly harmless, though sometimes in summer the additional heat pumped into the water can be harmful depending on the size of the body of water.

The real problem is that lots of areas (especially in the US) haven't updated their water rights laws since the discovery of water tables. This is hardly a new problem, and big ag remains by far the worst offender here.

Then there's the raw materials in the supply chain... and like not to downplay it but water use is not exactly at the top of the list of environmental impacts there. Concrete is hella bad on CO2 emissions, electronics use tons of precious metals that often get strip mined and processed with little to no environmental regulation, etc.

Frankly putting "datacenter pumped water out of the river then back in" in the same aggregate figure as "local lake polluted for 300 years in China by industrial byproducts" rubs me the wrong way. These are entirely different problems that do not benefit anyone from being bastardized like this. It feels the same way to me as saying "but there are children starving in Africa!" when someone throws away some food – sure throwing away food isn't great, and it's technically on-topic, but we can see how bundling these things together isn't useful, right?