Critics and environmental observers have raised concerns regarding the sheer scale of the proposed data centre expansion, questioning whether the state’s infrastructure can sustainably support such a massive influx of power and water demand. While the policy mandates the use of green energy and desalination, the practical reality of scaling up to 7.5 GW of capacity presents significant challenges. Skeptics argue that the environmental footprint of constructing and operating these facilities—even with renewable energy—could strain local resources and potentially impact the availability of water and power for other sectors and the general public.
There is also a degree of caution regarding the financial incentives being offered. Critics point out that while subsidies and tax subsidies and tax holidays are effective at attracting initial investment, they represent a significant cost to the state exchequer. The long-term economic benefit of these data centres must be weighed against the potential for a 'race to the bottom' where states compete by offering increasingly generous concessions that may not yield proportional returns in local job creation or tax revenue. There is a fear that if the promised investments do not materialize as expected, the state could be left with underutilized infrastructure and a depleted fiscal budget.
Furthermore, the reliance on hyperscale data centres raises questions about digital sovereignty and the concentration of power. As these facilities become the central nodes for data processing, the dependence on a few large global operators could create vulnerabilities in the state’s digital resilience. Observers emphasize that the government must ensure that the policy includes rigorous oversight and accountability mechanisms to prevent environmental degradation and to ensure that the promised high-value jobs actually reach the local workforce. Without careful management, the ambition to become a data hub could lead to unintended social and environmental consequences.