India Pushes Ahead in AI Race with Massive Data Centers, But Andhra Pradesh Pays Price with Water, Energy, and Uncertain Jobs

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AS INDIA pushes hard and fast to move ahead in the global AI race, a report has come as a warning for Andhra Pradesh. The New York Times reports that the establishment of giant data centres in the city has raised concerns over environmental risks, public subsidies, and whether the projects will actually create enough jobs as promised by the government. It is true that India wants to become an AI powerhouse. But many people in Visakhapatnam are now asking who will pay the price for that dream?

New York Times investigation has found that the Andhra Pradesh government is aggressively backing two of the country's biggest data centre projects, including Google's $15 billion investment in the city, partnering with the Adani Group. The projects are expected to more than double India's existing data centre capacity, but they are also triggering concerns over water usage, electricity demand, and public money being used to support private companies. For the government, these projects are India's ticket into the AI boom. However, for many residents and experts , they could become a long-term burden.

Google, Adani Lead India's Biggest AI Data Center Push

According to the New York Times ground report, visitors entering Tarluvada village on the outskirts of Visakhapatnam are greeted by giant billboards saying "Welcome, Google, Welcome!" carrying photographs of Prime Minister Narendra Modi and several Andhra Pradesh leaders. The Tech giant has been partnering with the Adani Group to setup AI datacenters in the southern state, while another equally large facility is being developed by a joint venture between Brookfield Asset Management and Reliance.

The report claims that once both projects become operational, they will more than double India's total data centre capacity compared to last year. The state government believes these investments will do much more than simply store data. "For me, it's not merely about the data center," said Andhra Pradesh IT Minister Nara Lokesh, as quoted by NYT. The minister further added, "So the power electronics, the air conditioning, the building materials guy, the whole nine yards. We are now bringing all of them to my state to do the manufacturing.”

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The investigative report by Mujib Mashal and Hari Kumar found that Andhra Pradesh has offered Google a 25% discount on land besides subsidies on electricity and water. It also claims that the Centre made tax changes sought by Google regarding companies storing data in India. NYT report claims that India currently produces nearly 20% of the world's data, but its share of global data centre capacity remains very small. 

Govt’s Big Promises vs Complex Reality

The Chandra Babu Naidu government says that these projects will create massive employment and attract more industries into Andhra Pradesh. However, according to the New York Times, officials claim Google's project alone could create around 1.2 lakh jobs during construction and another 60,000 jobs after completion.

However, many experts hold the contrary opinion. The report says hyperscale data centres are highly automated and generally do not require a large permanent workforce. Critics told NYT that documents submitted for environmental clearance suggest the actual number of employees could be only a fraction of what is being projected publicly.

The concern becomes even bigger because India is already struggling to generate enough quality jobs for its young demographic. The International Monetary Fund (IMF) has previously warned that artificial intelligence could bring a "tsunami hitting the labor market", disrupting parts of the technology services sector that employs millions of Indians.

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Water, Electricity and Energy Concerns Over AI Data Centers

Much of the criticism regarding the AI data centers is around the environmental concerns. According to the New York Times, activists have questioned why massive data centres, which consume huge amounts of electricity and water, are being built in an area that already faces water shortages during summer. They also alleged that environmental safeguards were diluted and construction work began before mandatory approvals were fully received. 

One petition before the National Green Tribunal reportedly includes satellite images claiming work had already started before environmental clearance was granted. NYT report also says one site is located near a wildlife sanctuary while another falls within the catchment area of a drinking water reservoir, making it a concern for wildlife as well.

V.S. Krishna of the Human Rights Forum told the New York Times, “This whole region is being asked to absorb an enormous amount of infrastructure cost, environmental risks, without a public debate. This is not a defense deal, this is a developmental project. Why should it be shrouded in this opacity?"

Former Union bureaucrat and energy expert E.A.S. Sarma also questioned the dubious partnership between Adani and Modi. "Google is very clever — it has joined hands with Adani, because Adani can clear anything here in the government of India," Sarma told the New York Times. He argued that building new transmission lines and other supporting infrastructure would eventually increase electricity costs for ordinary consumers.

Meanwhile, Google and the Adani Group have rejected the criticism. The New York Times reported that Google executive Alexander Smith said the company had carried out environmental audits and that the facilities would use cooling technology designed to minimise water consumption. He reportedly also said the project would remain independent of the local drinking water supply and that Google was investing in clean energy generation.

An Adani Group spokesperson also told NYT that the company had obtained all necessary statutory approvals and remained committed to developing the project in full compliance with the law. 

However, despite those assurances, the debate is only getting louder. For the Andhra Pradesh government, Visakhapatnam is being projected as India's future AI capital. But for many people living there the bigger question is whether the benefits of these billion-dollar projects will actually reach local communities, or will it be just another project that benefits industrialists.

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