Research from the Red Foundation: The unseen Costs of AI
As demand for AI accelerates worldwide, cities are experiencing a rapid expansion of data centres - the physical backbone of AI. This report highlights the growing tension between scaling AI infrastructure and maintaining urban liveability, environmental sustainability, and community wellbeing.
AI-driven data centre growth is placing unprecedented pressure on energy grids, water supplies and land. Regions from Northern Virginia to London are already seeing conflicts between digital infrastructure, housing development, and essential natural resources. At the same time, the economic returns of AI remain uncertain, with limited productivity gains and rising concerns about safety, ethics, and accountability.
Yet the long-term case for investing in AI infrastructure is strong: global competitiveness, national security, scientific progress, and potential breakthroughs in healthcare, climate resilience and public services. AI is positioned as a general-purpose technology capable of unlocking entirely new industries if supported by a robust, sustainable foundation.
The report argues that the real issue is not AI versus communities, but inadequate transparency, planning, and governance. Key failures include limited disclosure of energy and water use, outdated planning frameworks, and unclear responsibilities when AI systems cause harm.
To create a balanced, sustainable path forward, the report recommends clear guardrails: mandatory reporting of resource consumption, strict sustainability criteria for new data centres (including renewable power and efficient cooling), and mechanisms ensuring local benefits and accountability.
Ultimately, the report calls for a “middle path” where innovation is encouraged but guided by strong governance ensuring AI serves people, communities, and the planet, rather than competing with them.