Land, Energy, Water – sounds like the demand of a people fighting for basics but these are three resources that will dominate public policy discussion in the world as cities vie with one another to attract companies to set up data centres. Sustainability has not been a subject of debate linked to data centres and AI but it should be. Given the intensity of water usage, it is imperative to make appropriate investments in water treatment.
It is time to build an alternate media that will not stop addressing and communicating these issues because any feeble voice will get drowned in the growing ‘technology-investment syndrome’, just as it happened in ed-tech space. I have already written about land and data centres – Land-based business models in data centres. I will focus on water and energy in this writing. I have quoted more from US sources because of extensive studies conducted by independent agencies. The data, with some country-specific variations, applies to the problem.
Water
Data centres are intensive users of water and will likely get priority over citizens. The Conversation, in an article on August 19, 2025 titled “Data centers consume massive amounts of water – companies rarely tell the public exactly how much” refers to a 2024 report from the Lawrence Berkeley National Laboratory which “estimated that in 2023, U.S. data centers consumed 17 billion gallons (64 billion liters) of water directly through cooling, and projects that by 2028, those figures could double – or even quadruple. In 2023, U.S. data centers consumed an additional 211 billion gallons (800 billion liters) of water indirectly through the electricity that powers them. But that is just an estimate in a fast-changing industry”.
To give a striking picture of water usage, “in 2024, one data center in Iowa consumed 1 billion (3.8 billion liters) gallons of water – enough to supply all of Iowa’s residential water for five days.”
India
According to a BBC article (November 10, 2025), India’s data centre boom confronts a looming water challenge – “The sector is poised for “explosive growth”, according to global real estate advisory JLL, with India’s data centre capacity projected to surge 77% by 2027 to reach 1.8GW. Some $25-30bn is expected to be spent in capacity expansion by 2030, according to various estimates”. According to the World Bank, India has 18% of the world’s population, but only 4% of its water resources and 70% of the available water is contaminated. Moreover, by 2030, twenty-one major cities will run out of groundwater according to a study by NITI Aayog. Root causes are multifaceted, from over–exploitation of groundwater to poor rainwater harvesting, water mismanagement, pollution, inefficient irrigation, and legal and institutional challenges.. India’s data centre water consumption, meanwhile, is expected to more than double from 150 billion litres in 2025 to 358 billion litres by 2030, putting further pressure on its water table.
The Economic Times reported (September 8, 2025) a Morgan Stanley study estimating that AI data centres will drive 11-fold water consumption by 2028.
According to the Observer Research Foundation, “India’s per capita water availability has already fallen from 1,486 m³ in 2021 to a projected 1,367 m³ by 2031, well below the water stress threshold of 1,700 m³. Over 1,000 administrative blocks are now classified as “over-exploited”, where groundwater extraction exceeds recharge. Erratic monsoons, which now bring longer dry spells punctuated by intense downpours, are disrupting both river flows and aquifer replenishment. In 2024, Himachal Pradesh and Uttarakhand recorded multiple cloudbursts and flash floods in a single monsoon season, while districts in Marathwada and north Karnataka declared drought before the year was out. The duality of too much and too little water—sometimes in the same basin within months—is fast becoming India’s hydrological baseline”.
Investment in water treatment
It is a no-brainer that we must invest in water treatment proportionate to the investment in data centres because that is the only way we will counter the water-depleting influence of data centres. Even if this were to be investment-focused it doesn’t matter because at least the prospects of profitable business will help address the problem.
The Council on Energy, Environment and Water underlines the need for a circular economy approach. As it notes, “The market value of treated used water in India will be INR 72,597 crore (USD 8.35 billion) in 2047. As much as 31,265 million cubic metres (MCM) of TUW will be available for reuse in the industrial and irrigation sectors by then. Across these two sectors alone, the annual revenue through the sale of TUW can reach INR 72,597 crore (USD 8.35 billion) by 2047.
- The used water treatment sector will generate over 100,000 (1 lakh) jobs by 2047 for maintaining sewage treatment plants alone. Additional jobs will be created for the construction of sewage treatment plants, pump stations, and conveyance infrastructure.
- The capital cost for establishing used water treatment capacity required by 2047 is INR 1,56,494 – 2,31,050 crores (USD 18-27 billion). This is the investment required to reach the national target of 100 per cent used water treatment by 2047.
Energy
A lesser, but significant concern apart from water, is energy use.
A study by (October 2025) the Lincoln Institute of Land Policy assessing the land and water impacts of the AI boom observed thus: A conventional data center—think cloud storage for your work documents or streaming videos—draws as much electricity as 10,000 to 25,000 households, according to the International Energy Agency. But a newer, AI-focused “hyperscale” data center can use as much power as 100,000 homes or more. Meta’s Hyperion data center in Louisiana, for example, is expected to draw more than twice the power of the entire city of New Orleans once completed. Another Meta data center planned in Wyoming will use more electricity than every home in the state combined.
According to the International Energy Agency (IEA), India’s electricity consumption for data centres is expected to double from 0.5-1% of the country’s total power demand to around 1-2%. As the IEA notes, “This could mean increased use of fossil fuel-based energy, because right now there is no regulation that forces data centres to use renewable energy”. Many data centres in India have signed contracts with renewable energy companies; formally “mandating the use of clean energy” will make this growth more sustainable.
Sustainability is critical
Transportation has dominated the debate on global warming and sustainability. The focus must shift to data centres, cloud and AI.
