You might have a point if it was wheat for human consumption vs datcenter, but those aren't the water hogging plants, which are stuff like almonds, alfalfa (for export)[1]. Comparing those instead, it's unclear whether those are "more important and more beneficial to humanity" than AI, which also genuinely provides utility to people (as evidenced by its popularity).

[1] https://www.npr.org/2023/08/09/1192996975/amid-a-water-crisi...

yes and no. Most agriculture is not necessary for pure survival, especially water-needing crops in the desert. It's more luxury food products.

In addition, increasing human productivity through technological innovation is the only thing that ever let us escape the malthusian trap.

In absolute terms, yep. In marginal terms, not so much. See also: paradox of value

Honestly, it's hard to tell. Humanity benefits a lot from the massively complex set of technologies that require the existence of big data centers. Including agricultural production itself.