X is terrible, so don’t address Y is an awful way of framing any issue.
If you're complaining about resource usage, but only when that resource is being used by one thing you don't like, you're just a tool for somebody else's agenda.
Specifically, if someone ACTUALLY cared about foolish uses of freshwater, they'd be advocating for reforms in water rights that result in growing extremely water-inefficient crops in semi-arid and desert environments. Mostly almonds and alfalfa, especially when these are for export.
One would also make the distinction of where the water came from important. Some places are flush with fresh water and its usage isn't terribly important, other places are deserts.
Anyway there should just be a "sin tax" for using freshwater for frivolous things like golf courses in the desert and datacenters who don't want to invest in less wasteful cooling solutions.
This report praises AI as a part of the next technological revolution, but points out there are problems that should and can be addressed to make its benefits more equitably distributed, to minimize its negatives, to promote transparency in resource use, and to address sovereignty issues.
Discussion of water rights reform, water use for almonds, alfalfa, and golf courses, etc. are completely irrelevant to the goal of this report.