Scale down AI resource consumption, else risk jeopardising energy, water security

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The democratisation of artificial intelligence (AI) risks jeopardising critical priorities like energy, water, housing, and even food security, Economic Survey 2025 said on January 31, adding that it is time to scale down their resource consumption.

“Without ground-breaking innovations and strategies to make AI scaling economically viable —both financially and in terms of resource consumption — efforts to democratise AI will jeopardise critical global priorities such as energy and water security, and even housing or food security,” the survey said.

The document added that construction of sprawling data centres risks displacing essential land use, further exacerbating these challenges.

The survey underscored India's significant growth and expansion of data centre infrastructure amid rising demand for digital services. The domestic data centre market is poised to grow from $4.5 billion in 2023 to $11.6 billion by 2032, at a CAGR of 10.98%, as per one estimate.

The survey said the imperatives for AI developers is clear - scaling down resource consumption while simultaneously boosting performance is not just a technical hurdle, but the defining bottleneck that will shape the future of AI.

“The time to address this pressing issue is now,” said the survey.

No amount of investment can force mass adoption unless the technology makes economic sense for the user and the society. In the case of AI, if it makes sense for the former and not the latter, policymakers have to step in and take some hard decisions, the survey added.

AI emerged as a big theme in the Economic Survey 2025, and the document added that the Indian information technology workforce employed in low-value-added services is the most susceptible to automation.

This is because companies are looking to cut cost, and may substitute labour for technology. The effects are already visible in the case of India's tech firms and the business process outsourcing (BPO) sector in the Philippines.

Also Read: Eco Survey's warning over AI outpacing humans in critical decisions

The survey said that as developments in the field of AI create tools capable of automation of basic knowledge creation and processing, skills such as critical thinking, higher degrees of creativity, and the capacity for more specialised knowledge may well be the new normal.