Water-guzzling AI and data centres: An opportunity for funds-starved municipalities

Balancing India’s AI future with sustainability concerns

India stands at the cusp of a digital revolution.

The explosion of data, the growing adoption of Artificial Intelligence (AI), and the evolution of data centres are transforming every sector of the economy, from banking and governance to agriculture and healthcare.

While there may be multiple views on whether AI is a boon or a bane, the fact is, we can’t stop its phenomenal progression. So, we should focus on harnessing it for the greater good of India.

A challenge is that these transformations come at a hidden environmental cost: massive water consumption by data centres and AI infrastructure.

The hidden thirst of the digital economy

Globally, data centres consume billions of litres of water every day for cooling their servers. AI models further multiply this consumption due to the high computational heat they generate.

As an aside, while mining of cryptocurrency also consumes enormous amounts of water, fortunately, India isn’t yet deeply invested in that sector.

With its growing ambitions in the AI and digital infrastructure space, India risks adding tremendous pressure on its already stressed freshwater resources unless urgent steps are taken without delay.

A simple, scalable solution: Mandate use of treated wastewater

The solution is within reach and can be implemented without public expenditure.

The Government of India should enact a policy mandating that all new and existing data centres and AI infrastructure must use only treated wastewater for cooling and other non-potable requirements.

Such a move will bring multiple long-term benefits:

1. Saving freshwater for people and agriculture: India’s per capita water availability is steadily declining. Using treated wastewater (which is mostly discharged into rivers or left to stagnate) for industrial cooling will free up millions of liters of freshwater daily for conventional uses like drinking, irrigation, and sanitation.
2. Creating a market-driven model for wastewater treatment: Mandating treated wastewater use will trigger private investment in high-quality sewage and wastewater treatment plants, esp. near urban and industrial hubs. This will reduce the burden on local governments and urban bodies while creating a self-sustaining ecosystem for water recycling, funded entirely by the tech and data sector.
3. Enabling green growth without sacrifices: India wants to be a global data hub, but it must not be at the cost of sustainability. By making treated wastewater mandatory for data centres, India can show the world that digital growth and environmental responsibility can go hand-in-hand.
4. “User pays” principle: “Polluter pays” principle doesn’t work when the polluters are common citizens. And Municipalities are funds-starved. I’m proposing a new approach: “User Pays”. Data Centres and AI clusters are not only water guzzlers, but also very profitable. Requiring them to use only recycled water is a fair policy, making them bear the cost of their ecological footprint. This also aligns with the global ESG (Environmental, Social, Governance) focus that investors now demand
5. No burden on public funds: This is perhaps the most attractive feature. With just a regulatory push, a nationwide water reuse ecosystem can be created at no cost to the public exchequer.

Modern, cost-effective, and space-effective technologies like AICR (Advanced Immobilized Cell Reactor), MBRs, etc. are available today that can mostly re-use the water used by cooling towers, using treated municipal wastewater for the balance make-up water. (Disclosure: AICR is a technology utilized by the author’s company).

This is not a solution to treat all the wastewater of all the municipalities. But at least it will avoid large-scale use of fresh water by the digital industry.

Conclusion

India’s digital leadership cannot come at the cost of its water security. If we are to build a “Digital India,” we must also build a “Resilient India,” where every megabyte processed doesn’t come at the cost of a liter of fresh water.

A simple law mandating the use of treated wastewater for data centres and AI cooling can help India conserve a lot of fresh water, foster private investment, and prove that green growth is not just possible, but profitable and responsible.

Let the future be digital and sustainable.

Note:
1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.

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