India is planning a massive ‘data city’ in Visakhapatnam to power its AI ambitions and close the gap with the US and China, backed by billions in foreign investment.
VISAKHAPATNAM: India is planning a vast new “data city” on a staggering scale as it races to narrow the artificial intelligence gap with the United States and China.
The project, spearheaded by Andhra Pradesh’s information technology minister Nara Lokesh, positions the port city of Visakhapatnam as a cornerstone of India’s AI push. “The AI revolution is here, no second thoughts about it,” Lokesh told AFP ahead of an international AI summit in New Delhi.
“And as a nation… we have taken a stand that we’ve got to embrace it.”
The state has secured investment agreements totalling US$175 billion involving 760 projects. This includes a US$15 billion investment by Google for its largest AI infrastructure hub outside the United States.
A joint venture between India’s Reliance Industries, Canada’s Brookfield and US firm Digital Realty is investing a further US$11 billion to develop an AI data centre in the same city. The planned “data city” ecosystem will cover a 100-kilometre radius, an area comparable to the width of Taiwan.
Lokesh outlined a sweeping vision that goes far beyond data centres. “I’m chasing the companies that make those servers that go sit in those data centres, the companies that make the entire air conditioning, the water-cooling system — the whole nine yards,” he explained.
To attract major investors, Andhra Pradesh is offering land at one US cent per acre. The state government claims it received close to 25% of all foreign direct investment to India in 2025.
The 43-year-old, Stanford-educated minister is the son of Andhra Pradesh Chief Minister N. Chandrababu Naidu, who helped turn Hyderabad into a major technology hub. They are allies of Prime Minister Narendra Modi, who will host the AI Impact Summit.
India currently ranks third in a global AI power ranking by Stanford University, sitting above South Korea and Japan. With more than a billion internet users, the country has seen a surge of investment as generative AI players seek inroads.
Microsoft said in December it will invest US$17.5 billion to help build India’s artificial intelligence infrastructure. CEO Satya Nadella called it the firm’s “largest investment ever in Asia”.
Critics say India lags in access to high-end computing power or commercial AI deployment. Some question whether data centres will create meaningful employment, but Lokesh rejects that.
“Every industrial revolution has always created more jobs than it has displaced,” he said. “But it has created those jobs in countries that have embraced the industrial revolution.”
He argues the jobs and economic benefits would more than compensate for the giveaway cost of land. The state has accounted for the vast electricity and water demands of the energy-hungry industry.
It plans to tap “surplus water” that drains into the Bay of Bengal to cool the massive data centres. “It’s a crime that so much water during monsoons goes into our oceans,” Lokesh said.
He cited China as an inspiration, admiring how India’s rival had “been able to systematically bring people out of poverty” at speed. The state’s plan to create industrial clusters was something he had “learned from China”.
With a target of six gigawatts of data centre capacity, Andhra Pradesh is betting that speed and scale will give it an edge. New Delhi last year agreed to “in-principle approval” for six 1.2 GW nuclear power plants at Kovvada in the state.
“We are on a journey,” Lokesh said. “We will execute these projects at a pace that the country has never seen”.
The Sun Malaysia
