Microsoft has been accused of illegally dumping industrial waste, causing significant environmental damage and disrupting the lives of local residents when developing a data centre in India.

According to allegations, the technology company has encroached on land outside the 1,000 people Mekaguda village, polluted a nearby lake with its waste, and harmed the livelihoods and health of local people who rely on the lake for fishing and agriculture.

The petitioners filed a complaint with the regional Telangana government claiming that Microsoft's actions have had a devastating impact on the environment and the local community. The lake, which was once a vital source of water and livelihood for many, is now contaminated with pollutants that pose a serious health risk.

Microsoft has yet to respond to the allegations, but local residents are demanding that the company take immediate action to address the environmental damage and compensate those affected by its actions. The government is also under pressure to investigate the matter and hold Microsoft accountable for any wrongdoing.

"This strategic investment is aligned with Microsoft’s commitment to help customers thrive in a cloud and AI-enabled digital economy and will become part of the world’s largest cloud infrastructure," Microsoft said when announcing the project, of which its Mekaguda data centre forms a part.

The controversy highlights the environmental, financial, health and other negative impacts of AI.