As India moves quickly to build more data centers for the AI era, some residents are asking who actually benefits.
Critics say land, water, and tax incentives are flowing to private companies while local communities are being left out of decisions that could permanently reshape their neighborhoods.
Here's what to know
Osama Manzar, founder of the nonprofit Digital Empowerment Foundation, says India's data center boom risks reproducing an extractive model in which companies gain control over vital resources and nearby communities are left to carry the costs.
He told Rest of World that authorities often present data centers as development projects even when residents have not been meaningfully consulted before land is acquired or construction starts. He also pointed to projections cited by the outlet that by 2030, data centers could consume water equal to the annual household needs of 1.3 billion people and electricity equal to the needs of 650 million people.
"The government is shaking hands with data center companies without consulting with their own people," Manzar said.
He said promises about job creation deserve scrutiny because many data centers rely heavily on automation and may employ relatively few local residents.
TCD Picks » Quince Spotlight
💡These best-sellers from Quince deliver affordable, sustainable luxury for all
Manzar said awareness is often so low that many people do not understand what a data center is until, in his words, "suddenly there is activity in the neighborhood." He pointed to organizing in Visakhapatnam, where Google is building a data center, and to concerns in Telangana, where Microsoft is building a hub on land that he said includes disputed parcels.
More background
His concerns are rooted in years of work on digital inclusion. As Rest of World noted, just 1.2% of India's population was online when Manzar started the Digital Empowerment Foundation in 2002; the current figure is above 70%. Even so, he said the AI build-out could create another system in which the gains are concentrated elsewhere.
He contrasted data centers with traditional factories, which can bring larger employment benefits to the areas where they are built. By comparison, he said, data centers may consume significant amounts of land, electricity, and water while leaving communities to deal with noise, pollution, and long-term land-use changes, despite having little say over whether the projects proceed.
AI is becoming increasingly tied to the energy grid. It can help forecast electricity demand, improve efficiency, and optimize renewable energy systems, but the infrastructure that powers AI also relies on energy-intensive servers and cooling systems.
If that expansion is handled poorly, it can strain water supplies, increase pressure on utilities, raise household costs, and deepen concerns about misuse, security, and unintended social consequences.
What can be done?
Manzar said consultation must come before agreements are finalized. He said village councils, district representatives, landowners, tillers, agriculturists, and women's groups should all be included in decisions about whether projects move ahead.
He also said communities need more than broad assurances. If governments are offering discounted land and tax exemptions, residents should be able to review written commitments covering community benefits, environmental protections, and resource use.
Manzar said a more responsible approach could favor smaller, decentralized data centers built around local needs such as farming, governance, or regional business activity, rather than massive facilities serving faraway users.
He also made clear that alternative water sourcing does not solve the core issue if communities never agreed to host the project in the first place.
"Developing countries should not become data waste centers, serving the elite of the world," he said. "If you are coming to my neighborhood, first serve us."
Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.
