The Indian government is offering major subsidies and incentives to foreign technology firms expanding artificial intelligence-based data centers, while local communities express growing concern over water shortages, farmland loss, and environmental strain. In Andhra Pradesh’s coastal city of Visakhapatnam, Google launched a large AI data center project last year, receiving billions of dollars in incentives from the state government.

According to The Wall Street Journal, such AI data centers consume vast amounts of water to cool servers, raising alarm in a country where groundwater levels are rapidly declining. Many farmers in Visakhapatnam have reportedly been forced to give up their land, with families facing displacement despite compensation. The $15 billion project includes a 10-year 25% discount on water use, land concessions, and subsidies for electricity and infrastructure.

Analysts cited in the report warn that weak infrastructure and water scarcity could make the long-term impact of such projects more severe in developing countries. Google stated it aims to replenish more water than it consumes globally by 2030 through restoration and agricultural technology initiatives.