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Data centre surge strains resources: Can AI learn to consume with care?

22 Dec 2025
3 min

AI and Its Environmental Impact

The rapid expansion of Artificial Intelligence (AI) technologies has brought to light significant environmental challenges concerning energy and water consumption. This summary explores the implications of AI growth, particularly focusing on data centers, and potential solutions to mitigate their environmental impact.

Energy and Water Consumption in AI Operations

  • AI queries, such as those processed by platforms like ChatGPT, require substantial energy and water resources.
  • An average ChatGPT query consumes about 0.34 watt-hours of electricity and 0.000085 gallons of water.
  • When scaled across billions of queries, the consumption totals resemble that of city-sized power and water usage.
  • India, a significant AI market, faces challenges with power and water scarcity, compounded by its expanding AI infrastructure.

Data Centers: The New Powerhouses

  • India's data centers, historically supporting fundamental internet operations, are now evolving to support AI with specialized GPU clusters that require significant power and cooling systems.
  • The installed power capacity for these centers is projected to increase from 1.5 gigawatts to nearly 9 gigawatts by 2030.

Investment and Infrastructure Development

  • Major tech companies, including Microsoft, Google, and Amazon, plan to invest over $60 billion in Indian AI data centers.
  • For instance, Microsoft is establishing a massive facility in Hyderabad with a $17.5 billion investment.
  • The expansion raises concerns about grid capacity, power shortages, and the ability to integrate renewable energy sources effectively.

Environmental Concerns and Solutions

  • Data centers pose a risk of increasing carbon emissions, especially if reliant on coal-based power, which currently accounts for half of India's electricity.
  • Transitioning to renewable energy could potentially cut CO2 emissions by half.
  • India's renewable energy capacity is substantial, with over 200 gigawatts installed and growing by 30 gigawatts annually.
  • Data centers should be strategically located in regions abundant with renewable energy resources.

Water Usage and Mitigation Strategies

  • Data centers can consume up to five million liters of water per day, with India's consumption set to rise sharply by 2030.
  • Mitigation strategies include employing air-cooling, recycled water systems, and rainwater harvesting.
  • Smaller, modular data centers are less water-intensive compared to large hyperscale campuses.

Best Practices and Future Outlook

  • Adopting global best practices could involve using renewable energy and waste heat recycling, as seen in Nordic countries.
  • Exploration of innovative ideas, such as repurposing decommissioned power plants into AI data centers, presents opportunities for sustainable development.
  • Increasing transparency and setting benchmarks for efficiency, like Power Usage Effectiveness (PUE), are crucial steps forward.

Technological Advancements

  • Technological advancements could contribute to solving the issues they create, such as developing energy-efficient chips and smart cooling systems.
  • AI-driven solutions have the potential to optimize power and water usage further, ensuring a sustainable approach to technology management.

In conclusion, while AI technologies bring immense growth opportunities, they also present environmental challenges that need urgent addressing through strategic planning, investment in renewable resources, and adoption of global best practices.

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