India’s Push for AI Supremacy Faces Backlash Over Data Center Resource Strain

MUMBAI — The view from Indian engineer Tushar Shetty’s Mumbai apartment captures a tension playing out around the world as the artificial intelligence boom fuels an unprecedented data-center building spree.

What was once a stretch of lush greenery outside his 21st-floor window is now a scar of red earth where trees were felled to make way for an Amazon facility that forms part of the tech giant’s planned $21 billion investment in AI infrastructure in India by 2030.

“I would not have bought the house if I had known,” said the 46-year-old, lamenting a purchase made just five months ago.

From the suburbs of Virginia to the outskirts of Amsterdam and Dublin, residents have increasingly rebelled against the spread of AI data centers, complaining of noise, surging electricity consumption, water stress, and the industrialization of residential neighborhoods.

That resistance is gaining ground in India, where Amazon, Google, and Microsoft are pouring billions into facilities that advance Prime Minister Narendra Modi’s ambition to host “the whole world’s data,” stretching from Maharashtra in the west to Andhra Pradesh in the south.

Unable for now to match the frontier models emerging from the US and China, India is pursuing a different path, betting that dominance in the physical backbone of artificial intelligence may prove just as valuable.

The strategy sits at the heart of Modi’s investment pitch as the world’s back office loses its shine, even as the ambition collides with concerns over scarce resources and communities living alongside the infrastructure powering the digital economy.

India holds 4 percent of the world’s freshwater for 18 percent of its people, and data centers are clustering in cities already short of it. S&P Global estimates that 60 percent to 80 percent of Indian data centers could face high water stress this decade.

In 2025, data centers used about 150 billion liters of water, a figure projected to more than double by 2030, according to research firm Mordor Intelligence.

A Prominent Flashpoint

The Amazon project near Mumbai is emerging as one of India’s most prominent flashpoints. Reuters interviews with more than two dozen residents and a review of official correspondence show growing concerns that it will strain local power and water supplies and generate noise harmful to health, particularly for children and the elderly.

Amazon and local authorities have strongly defended the project, saying it will not burden public utilities because water and power will come from dedicated sources. The dispute has nevertheless sparked street protests and drawn opposition politicians into the fight.

Modi’s government has also mounted a public defense, promoting data centers online as “the invisible engines powering India’s digital life” and arguing modern technologies use water and electricity more efficiently.

The Ministry of Electronics and Information Technology, the Prime Minister’s Office, and Maharashtra’s chief minister’s office did not respond to requests for comment.

On September 8, hundreds of residents, including elderly people, gathered beside the site holding placards reading “Data centers are energy vampires.” They want the project moved elsewhere.

“If the data center stops, we will stay … If it goes ahead, we will move,” said Vasudha Shetty, 62, who bought a flat near the 54-acre planned facility but wants to prioritize a quiet retirement.

Amazon Weighs Community Outreach

More than 1,000 residents living near the site say the project was pushed through without meaningful consultation.

In Virginia, home to the world’s largest concentration of data centers, Amazon paused a 2024 proposal for three facilities amid concerns over noise and proximity to homes, saying it wanted more time for community engagement. Mumbai residents say they never got that chance.

Internally, Amazon is not overly concerned because government officials have indicated the protests will pass, according to a person familiar with its planning. Still, the company is drawing up community outreach plans to address concerns over noise, water, and power.

“Building data centers comes at a cost. Amazon at a global level is prepared to work with the community and limit any inconvenience,” the person said. “For now, there is no other option but to live with protests.”

Amazon told Reuters the data center will use water-free cooling, a dedicated power supply separate from homes, and noise-mitigation measures. It added that more saplings were planted than trees removed.

Still, even some industry executives question whether data centers belong next to neighborhoods.

“I will never set up a data center in a residential area,” Sharad Agarwal, CEO of Sify Infinit Spaces, which runs 14 data centers, said at an industry event in September. “Centers need abundant, uninterrupted power and water … and near homes, they risk being starved of both in a shortage.”

Microsoft has also unveiled a four-year $20.5 billion investment plan for India, mostly earmarked for AI data centers.

Political and Environmental Snags

In the southern state of Andhra Pradesh, environmentalists are opposing Google’s $15 billion data center project, citing risks to wildlife, water, and power supplies and alleging that a temple’s land was used without permission. Google and the state deny any wrongdoing.

The backlash has also turned political. In September, Aaditya Thackeray, an opposition legislator, joined Mumbai protesters demanding the Amazon project be relocated, saying his party would move it if returned to power.

Back in Mumbai, property broker Atul Jadhav said buyer concerns over views and property values may be hurting nearby resale prices.

“We will come out on the roads and do whatever it takes to stop it,” said Vidya Kadam, 68, who has lived in the area for 30 years.

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