Water usage is, in my opinion, a fair reason to object to AI datacenter placement and growth - but in the arena of public opinion it's more nuanced than some of the other arguments that could be made (noise and power usage being much more suitable ones) but it seems to have struck a cord.
There are absolutely terrible takes on each side of the water argument but this seems to be the one people are focused on so I guess it's up to folks in the know to try and give as much clarity on the topic as possible.