AI gold rush
India is racing to become a global AI powerhouse.
Our emerging Global Capability Centers (GCCs), the strategic nerves of 1,600+ global corporations, are evolving into AI-first hubs.
They will generate high-value intelligence that is projected to add $1.7 trillion to our GDP by 2035, very important in our progression towards Viksit Bharat.
However, this intelligence requires a physical home: the Hyperscale Data Center.
With the domestic AI market expected to reach $17 billion per year by 2027 and the data center industry attracting $10 billion in investment annually, India is seizing its ‘early mover’ advantage.
Water: A physical bottleneck
As we race for an ‘early mover’ advantage to ensure India doesn’t become a digital colony of the West or China, a physical bottleneck emerges.
A 100-megawatt (MW) AI-optimized data center can consume 2.5 MLD (million litres per day) of clean water for cooling, equivalent to the water needs of 6,500 households.
In a country where water tables are a matter of national security and agricultural survival, the concern some analysts raise, whether we can afford to supply so much water to these water guzzlers, is valid.
What if there was a way we can not only supply so much water, but also make AI Water Positive?
The infrastructure-to-intelligence hierarchy
To regulate this sector fairly, we must distinguish between the different players in the ecosystem:
- The GCCs: These centers employ 1.9 million Indians and provide the ‘Brainpower.’ Their direct water footprint is relatively low, limited to standard office usage.
- The AI infrastructure: The high-density GPUs required for AI processing generate intense heat, making the Data Center (DC) the primary water-intensive asset.
- The AI product: The technology itself must be harnessed to manage these resources more efficiently.
By targeting the water consumption of these DC developers, we can substantially solve more of the water problem than they create.
The 2X ZLD mandate: Decoupling growth from depletion
I propose a policy of Hydrological Regeneration that turns a corporate cost into a national asset.
Every new DC license should be made to sign up for a 2X Zero Liquid Discharge (ZLD) mandate:
- The 2X offset: The location of DCs and the availability of untreated sewage may not be the same. So, for every litre of water used for cooling, the DC developer must treat sewage and generate 2 litres of WHO-standard potable water for the public. This ensures a net-positive water balance for the state.
- The urban-to-rural bridge: Developers will fund and build high-capacity Sewage Treatment Plants (STPs) in nearby urban clusters. By converting untreated sewage into potable water, we create a new, drought-proof water source, also solving the problem of untreated/ under-treated sewage.
- Hydrological proximity: To maintain social and political equity, these treatment plants must be located within the same river basin and/ or as near to the DC as possible. This ensures the local community sharing the resource is the one that receives the reward.
Ease of doing business: The ‘fund-and-forget’ model
To maintain India’s attractiveness for investment, we must not burden tech giants with the implementation details of municipal plumbing. We suggest a ‘fund-and-forget’ framework:
- The CapEx: The investor pays for the construction of the 2X capacity plant as a prerequisite for environmental clearance.
- The Opex endowment: A capital sum is deposited into a Locked Escrow Fund. The interest from this fund, administered transparently by the local municipality, covers 100% of the plant’s operating costs and electricity for the life of the plant (which can usually be up to 50 years).
This cost (Capex + Opex) is a minuscule cost of the DC ecosystem, and so the DC developers won’t even think twice before agreeing.
It will ensure the infrastructure is self-sustaining and never becomes a ‘white elephant’ due to municipal budget cuts.
The investor gets a ‘plug-and-play’ approval, and the city gets a free, permanent water utility.
Conclusion: A sovereign and sustainable India
This way, we aren’t just building data centers; we are leveraging the AI revolution to fund the modernization of India’s water infrastructure.
It is time to prove that in the 21st century, India can lead the world in both AI and water management.
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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