Why Are AI Data Centres Booming Worldwide But Facing Criticism In The West?

AI is driving a new wave of data centre construction across the world and many countries are actively inviting investments. But why are data centres facing flak in the West?

India’s data centre industry is set for a sharp expansion over the next five years, with the market expected to more than double from about $10 billion in 2025 to $22 billion by 2030.

The United States dominates the global data center landscape, holding the highest number of facilities, with over 4,100 to over 5,400 operational as of early 2026.

The US accounts for roughly 40-46% of the global total, with top concentrations in states like Virginia and Texas.

Data centers power everything from streaming and cloud storage to the AI systems reshaping industries.

The pushback is driven by a combination of factors, including unprecedented strain on local power grids, high water consumption, rising utility costs for residents, and growing environmental concerns.

Large data centers use millions of gallons of water daily for cooling, which poses a severe risk to regions already facing water shortages or drought.

Cooling massive server farms requires millions of gallons of water daily—comparable to the usage of a small town.

Much of the water used in cooling large data centres cannot be reused. These facilities rely on vast amounts of water to prevent servers from overheating, but a significant share is lost through evaporation during the cooling process.

Not just in the US, data centres are also facing growing opposition in countries such as Ireland, the Netherlands and Spain.

India’s installed data centre capacity is projected to reach 1.7-2.0 GW by the end of 2026, backed by nearly $30 billion in investments. This is expected to further scale up to 4-5 GW by 2030.

India is increasingly positioning itself as a key data infrastructure hub in the Asia-Pacific region, supported by a rapidly expanding digital economy, rising internet penetration, and strong interest from hyperscale operators.