AI, IFIs, and Community Harm

AI’s rapid advancement is driving an unprecedented investment in data centers, with companies spending over $364 billion last year to meet the growing computational demands needed for agentic AI. These centers rely heavily on water-intensive cooling systems, often using municipal potable water to prevent microbial build-up, raising environmental and societal concerns, particularly in regions already experiencing water scarcity. Data centers can exacerbate utility costs, limit water accessibility, and contribute to long-term health risks in affected communities, disproportionately impacting low-income populations and people of color. International financial institutions are heavily funding these developments globally, underscoring the need for transparency, responsible resource management, and community engagement to balance technological progress with social and environmental responsibility.