VISAKHAPATNAM, India—When Google arrived last year in this sleepy coastal Indian city, the government rolled out the welcome mat, offering billions of dollars’ worth of incentives for the U.S. company to build data centers for artificial intelligence.

-snip-

What they do know is that Visakhapatnam doesn’t have much water, which is typically needed in large volumes to cool data-center servers. Some fear their community will be hollowed out entirely, with many residents already pushed from land they have farmed for decades for the $15 billion project.

-snip-

The Andhra Pradesh state government is giving Google a 25% discount for 10 years on the cost of any water it uses, along with a 25% discount on the land. Other subsidies include reimbursement of costs related to electricity infrastructure and upgrades, waivers on state taxes and discounts on the cost of power.

-snip-

Rights groups have criticized what they describe as a lack of public consultation about the project’s environmental impact. They have questioned whether the government can provide enough water to help cool data centers in a city the World Resources Institute denotes as under “extremely high” water stress. Some areas get less than an hour of tap water a day.

-snip-