Why data centres facing backlash worldwide as India expands AI:From US protests to UK restrictions, know their environmental impact

AI may look like software, but behind every chatbot response, generated image, and AI-powered service is a very physical infrastructure: huge data centres packed with servers that need enormous amounts of electricity, cooling, and land. As the AI boom accelerates, companies are building these facilities at an unprecedented pace. But the expansion is increasingly running into resistance from communities and governments concerned about electricity demand, water consumption, pollution, noise, and who ultimately pays for the supporting infrastructure. At the same time, countries such as India are actively encouraging more data centres because they are seen as essential for building AI capabilities, protecting data within the country, and attracting technology investment. This creates a growing global debate: How much local environmental and infrastructure pressure should communities accept in exchange for the economic and technological benefits of AI? Why are data centres facing backlash? Data centres are essentially large facilities filled with computing equipment. AI makes them particularly demanding because training and running advanced AI models requires huge amounts of computing power. The concerns surrounding them generally fall into several areas. 1. They consume huge amounts of electricity Data centres operate around the clock. Thousands of servers continuously process data, while cooling systems, networking equipment, and other infrastructure also require power. The rapid expansion of AI is increasing this demand further. The concern is not only whether a region has enough electricity, but also who pays for the additional power infrastructure needed to serve these facilities. In the US, this has become a major issue. The US House of Representatives recently passed legislation aimed at ensuring data centres cover the costs of new power and transmission infrastructure required for their operations, amid concerns that ordinary electricity customers could otherwise bear part of the burden. 2. Electricity bills can become a local concern Building a large data centre can require new transmission lines, substations and other grid upgrades. That has raised concerns in some US communities that residents could eventually pay part of those costs through higher electricity bills. This is one reason the debate has moved beyond environmental groups and into local politics. 3. Water is another major concern Many traditional data centres use water-based cooling systems to prevent servers from overheating. That becomes particularly sensitive when facilities are located in areas already facing water stress. The concern is straightforward: if a data centre uses large quantities of water, local communities may have to compete for the same resource. However, water consumption varies considerably depending on the facility’s cooling technology, climate, and design. 4. They can create environmental pollution Data centres need a reliable power supply. Some facilities use diesel generators as backup during power failures. Depending on how electricity is generated and how backup systems are operated, data centres can therefore contribute to emissions and local air-quality concerns. There is also a broader climate question: if rapidly increasing electricity demand is met partly through fossil fuels, the growth of AI infrastructure could make decarbonisation more difficult. 5. Noise can become a neighbourhood problem Data centres may look relatively quiet from the outside, but they operate continuously. Cooling fans, mechanical equipment, transformers and backup systems can produce a persistent low-frequency hum. For communities living close to these facilities, the problem can become more noticeable because the equipment runs 24 hours a day, seven days a week. 6. Jobs may not match expectations Data centres can create substantial construction activity and require skilled workers during the building phase. But once a large facility becomes operational, it may require far fewer permanent employees than a conventional large industrial project. That has created a question for communities: Do the long-term economic benefits justify the land, electricity, water and infrastructure required by these facilities?
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From US protests to UK restrictions: backlash is spreading The resistance is no longer limited to individual communities in the US. In September 2026, Scotland’s Parliament voted to suspend planning applications for new AI data centres for up to a year while national planning guidance and a strategy for large facilities are developed. Concerns included energy demand, water consumption and carbon emissions. The UK has simultaneously been treating data centres as strategically important infrastructure. The British government designated data centres as Critical National Infrastructure in 2024, reflecting their importance to services ranging from healthcare and finance to communications. Why is India pushing for more data centres? India is currently taking a different approach. The country’s growing digital economy, cloud adoption and AI ambitions are creating demand for large-scale computing infrastructure. Keeping more computing capacity within India can also help organisations meet data-residency, security and regulatory requirements for certain workloads. That is why the government and technology companies are encouraging investments in data centres. At the Microsoft AI Infrastructure Summit in New Delhi on September 21, Minister of State for Commerce and Industry and Electronics IT Jitin Prasada highlighted the strategic importance of such infrastructure. So, from India’s perspective, data centres are not simply buildings consuming electricity. They are being viewed as part of the digital infrastructure needed for AI, cloud computing, businesses and public services. Microsoft’s Hyderabad data centre: a different approach to water use Microsoft’s latest expansion in India provides an interesting example of how companies are trying to address one of the biggest criticisms of data centres: water consumption. On September 21, Microsoft announced its India South Central cloud region in Hyderabad, its fourth cloud region in India after Pune, Chennai and Mumbai. The facility has been designed for AI workloads and uses high-efficiency cooling technology that Microsoft says requires effectively zero water for cooling. Microsoft India and South Asia President Puneet Chandok said: Effectively zero water for cooling in India’s South Central. We’re not needing water in the first place by design. The company says the facility uses air-cooled systems rather than traditional water-based cooling. Microsoft has also said it is working on groundwater recharge, rainwater harvesting and watershed-resilience projects around the Hyderabad region. Its company-reported figures say these projects had added about 5 million litres of groundwater-recharge capacity in Elikatta by June 2026. This is important because it shows that data-centre expansion does not automatically mean identical environmental impacts. Cooling technology and the way a facility sources electricity and manages water can significantly change its footprint. But zero-water cooling does not mean zero environmental impact. The facility still needs substantial electricity, land, equipment and supporting infrastructure. Microsoft itself describes the Hyderabad region as part of a much larger expansion of India’s AI and cloud capacity. Also read: ISRO to set up advanced radar centre in Assam: Under Project NETRA, radar-based systems can help track objects and provide information about their movement

India is preparing for a much bigger data-centre buildout Microsoft estimates that India currently has around 2GW of data-centre capacity and expects that figure to grow six to seven times by 2035. The company’s new Hyderabad region is part of this larger expansion. Microsoft has also described India as a potential AI infrastructure hub for Asia and the Global South. That expansion could bring several benefits: But the same growth raises questions about electricity demand, land use, water availability, emissions, and the pressure on local infrastructure. So, is the growth of data centres harmful? There is no simple yes-or-no answer. Data centres themselves are essential infrastructure for modern digital services. Without them, cloud computing, online banking, streaming, AI applications, and many government and business services could not operate at today’s scale. The concern is about how and where they are built, how much electricity and water they consume, and who bears the cost of that expansion. A data centre using water-intensive cooling in a water-stressed region presents a different challenge from one using effectively zero-water cooling. Similarly, a facility powered predominantly by low-carbon electricity has a different emissions profile from one relying heavily on fossil-fuel-generated power. That is why the debate is increasingly shifting from “Should data centres exist?” to “What rules should govern their expansion?” The bigger AI infrastructure debate The global data centre debate highlights a key challenge: AI needs massive infrastructure, but its local costs cannot be ignored. While governments and tech companies see data centres as drivers of growth and AI development, communities are concerned about electricity, water, noise, and environmental impact. India is expanding this infrastructure, while companies such as Microsoft are exploring more sustainable designs. The challenge is to grow AI infrastructure without placing an unfair burden on local communities.