Meena (name changed), a resident of Kalpataru in Balkum, Thane, has learnt to keep buckets filled at home. Water cuts can last for days, while power outages for four to five hours are a regular summer feature. So when Amazon acquired the plot next to her housing society, the residents initially welcomed the news. Many expected the tech giant’s office to come up nearby, bringing higher rentals and perhaps better infrastructure to an area that struggled with water shortages for years.

Instead, they learnt that the site would house a data centre — a large digital storehouse packed with racks and servers — which typically requires millions of litres of water a day for cooling.

“Last week, we had no water for five days... how will they supply the data centre?” Meena asks businessline.

Her question finds an echo far beyond Thane — from Melbourne to Ireland and Italy — as the communities living near data centres push back against the water and power guzzling, the noise, heat and uncertain local benefits. In Melbourne, Jacqui Glover, president of the New Citizens of Tottenham group, said during a protest against a data centre in her area in early August, “Cloud is not invisible. It is made of concrete, steel and relentless noise. Living across the street from it changes your relationship with your own home.”

The backlash puts countries such as India in a quandary as they compete aggressively for the next wave of investment from hyperscaler companies — Amazon Web Services (AWS), Microsoft Azure, Google Cloud et al, which provide large-scale data processing and storage services. How to build infrastructure for the AI economy without passing the environmental and social costs to host communities?

A typical 100 MW hyperscaler data centre can consume nearly 2 million litres of water per day for on-site cooling, according to the Council on Energy, Environment and Water or CEEW. This is equivalent to supplying about 15,000 urban residents, as per government estimates.

For its next 1 GW AI data centre in India, Google has picked Visakhapatnam, in Andhra Pradesh, a region already grappling with “overexploited” groundwater, according to the Central Ground Water Board’s 2025 report.

While a conventional data centre meant for general business applications requires 5–15 kW power per hour, an AI data centre with high-performance graphics processing units (GPUs) needs 40–60kWh, or even 100-plus kWh for cutting-edge AI training facilities — enough to power 1,000 fridges for an hour. Data centres accounted for around 1.5 per cent of global electricity consumption in 2024, with demand projected to double to 945 TWh by 2030, as per a CEEW report.

“Average rack power density is expected to rise from 36 kW per rack in 2023 to 50 kW per rack by 2027, and the economics of AI infrastructure are scaling up at the same pace. Most enterprise data centres were not built for any of this,” Rahul Dhar President–Global Datacenter Operations, CtrlS Datacenters, wrote in a company blogpost.

Sources also pointed out that data centres in India are accorded the same priority as hospitals when it comes to power supply — namely the digital infrastructure will get a preference over residential areas in case of a major power outage. Most states, however, have separate power grids for data centres.

Land use for AI data centres is another area of concern, as it entails the clearing and conversion of large tracts, apart from the environmental contamination risks associated with water treatment chemicals, fuel storage and the presence of hazardous materials like lead and mercury in electronic equipment, Sushant Sarin, Managing Director and Head of Commercial Risk Solutions–India, Aon says.

Across the protests globally is the call for regulatory transparency. The WakeUp Thanekar group spearheading the protest against the Amazon data centre in Thane has written to local authorities for details such as the development plan, zoning classification, control regulations and permissions.

The members contend that it is essential for citizens to understand the precise land use and planning law that the authorities have relied on to okay the project.

In Visakhapatnam, the project documents are readily available but there is no clarity on details like the available water source.

While local data centre players confirm the need for environmental clearance due to generator usage, the Ministry of Environment, Forest and Climate Change said in response to a parliamentary question on data centres in August that such projects do not require environmental clearance “per se”.

“Then how are they deciding where to situate the data centres? We need to look at the impacts before becoming a hub,” Arpitha Kodiveri, comparative environmental law scholar and assistant professor of political science at Vassar College in New York, says.

Lombardy, in Italy, has enforced regional environmental laws to regulate the siting of data centres, including energy thresholds. For example, structures with 5 MW or less capacity are deemed ‘edge’ data centres permissible within urban areas, whereas a 10 MW centre would require a territorial agreement, including compensatory measures. Ireland has ruled that data centre companies should generate their own power, 80 per cent of it on-site renewable.

However, most countries currently regulate data centres by combining fragmented frameworks across cybersecurity, infrastructure development, and land acquisition.

India, in 2020, released a Draft National Data Centre Policy outlining single-clearance windows, economic zones, renewable energy focus and domestic manufacturing. But since it has not been notified, protests continue to simmer, with calls for environmental protections rather than blanket bans on data centres.

“Regulatory vacuums engender insecurity among communities since there is a lack of transparency over the likely impact,” Kodiveri says.

Compliance also aids client conversations. Foreign funding for data centres in India cooled from $600-900 million a month in the first half of 2026 to around $100 million in the following months, as per Tracxn. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, attributed this to fears over project delays due to the protests. Interest picked up in September when Swedish private equity firm EQT announced plans to invest around $30 billion.

At the State level, Karnataka recently approved a Sustainable Data Centre Policy to achieve 1 GW capacity by 2031. It proposes a ₹1,300.45 crore revised budget to create 10-12 per cent of India’s AI-ready data centre capacity.

Responding to the concerns flagged by residents, hyperscalers told businessline they are working on sustainable measures. AWS says its Thane data centre will use a closed-loop chemical coolant instead of water. For power, it will connect to the high-voltage transmission grid through its dedicated industrial substation. “We’re focused on creating a positive impact in the community,” says a company spokesperson.

But the protests continue in the absence of talks with company and State representatives.

On the opposite coast, in Visakhapatnam, Google talks of pairing the data centre with a multi-variable response spread over three to five years, including new subsea cable landings, power utility infrastructure, clean energy generation, and a centralised logistics centre.

Recruitment is on to ensure the AI Hub is fully staffed for eventual day-one operations, says Alexander Smith, Principal, Global Infrastructure and Energy, Asia Pacific, Google. A “long-term local talent pipeline and local supplier ecosystem” would be established to support multi-decade operations, he adds.

He says independent environment audits are being used to design facilities, including advanced air-cooled systems and sound-damping fans “to ensure we are a quiet, unobtrusive neighbour”.

As for power consumption, he points to the company’s standard use of 83 per cent less overhead energy than the industry average. It is also investing in clean energy generation in Andhra Pradesh and across India.

“This clean energy portfolio will power Google’s operations in India — including the upcoming Google AI Hub in Visakhapatnam,” says Smith, adding this would also ensure a more reliable power supply for local communities.

Sarin points to real-time advanced energy management systems, and digital twins and predictive maintenance tools to improve operational reliability.

“The challenge is less about technological feasibility and more about scaling them economically while balancing performance, sustainability and resilience objectives,” he says.

businessline attempted but received no response from Vizag district officers. Meanwhile, Education, IT and Electronics Minister Nara Lokesh had informed the Legislative Assembly on August 19 that Godavari river water would be diverted through the Polavaram project for the data centre. He added that the targeted 6.5 GW ecosystem for Vizag will require 3 tmc of water annually (1 tmc is around 28.3 billion litres). The Human Rights Forum points to the discrepancy with the 3.5 tmc cited on August 12 by Chief Minister Chandrababu Naidu.

“It concerns an enormous quantity of water in an already water-stressed Visakhapatnam,” it said in a public statement..

On the business side, the call for regulation is more nuanced. One of the reasons India is keen to enter the data centre market is the potential tax revenue. In the US the industry generated $204.4 billion in federal, State, and local tax revenue in 2024, up 26 per cent from 2023, as per a 2025 PwC study commissioned by the Data Center Coalition. In India, the government anticipates over $200 billion tax revenue, contributing to achieving a $30-trillion economy by 2047, as per Commerce and Industry Minister Piyush Goyal.

Between 2019 and 2025, committed investments reached nearly $95 billion, as per CEEW. A light-touch approach would help maintain this enthusiasm, an industry source argues.

The global call for data sovereignty has also pushed many hyperscalers to invest in long-term contracts to set up local data centres in major markets. Local players worry that the “misguided” and “harmful” dissent will cost India such big-ticket projects. ESDS Software Solutions had even flagged local protests as a risk in its draft red herring prospectus.

The naysayers aren’t relenting. Union Minister Jitendra Singh had projected nearly one lakh engineering jobs at an industry meet on ‘Future-proofing India’s data centres’. Protesters in Vizag counter this with the Google data centre’s environment impact assessment report, which mentions just 1,200 jobs, in a marked variance from the reported figure of 1.8 lakh jobs. They question the rationale for offering government subsidies to hyperscaler data centres that offer no domestic benefit.

As of January this year, India hosts around 271 data centres, spread across 23 million sq m, in six metro cities. From 1.5 GW by mid-2025, installed data centre capacity is projected to reach 4.5-6.5 GW by 2030, but still nowhere near the 500 GW capacity in the US and China.

“We need to increase our capacity if we hope to be among the top 10 data centre countries of the world in the next 10 years. Currently, we do not even rank in the top 15,” says Piyush Somani, Chairman and Managing Director of ESDS.

While the country targets 500 GW green energy capacity by 2030, the reliance on State policies remains a crutch. It worsens a widening gap between India’s investment-led data centre expansion and global shifts towards performance-based sustainability regulation, as per CEEW.

“If the public cost is real, the public dividend must also be real. If data centres consume local power and water without creating broad digital capability, India will have built impressive infrastructure but a poor national bargain,” warns Sanchit Vir Gogia, Chief Analyst and Founder of Greyhound Research.

Sarin expects the next generation of large AI facilities to favour peripheral or semi-urban locations where grid infrastructure can be developed at scale.

“The future model is likely to be a hybrid one: core facilities near major economic centres combined with larger AI campuses located in regions that can sustainably support long-term power and cooling requirements,” he says.

While governments and Big Tech deliberate on the barter, back in Balkum, Meena is left wondering whether there will be enough water and power to secure the basic needs of her family of three, including a toddler.

Published on September 28, 2026