India is preparing one of its most ambitious technology infrastructure expansions yet, as the southern state of Andhra Pradesh moves forward with plans for a sprawling artificial intelligence “data city” in Visakhapatnam.
State officials say the initiative is designed to strengthen India’s position in the global AI race, as competition intensifies with the United States and China, according to a local news report.
The project has drawn major international commitments and is being framed as a cornerstone of India’s long-term digital strategy.
Massive Investment Commitments Anchor The Project
Authorities say they have secured agreements worth roughly $175 billion across 760 projects.
Among the headline commitments is a reported $15 billion investment from Google to establish what would be its largest AI infrastructure hub outside the United States.
A separate partnership involving Reliance Industries, Canada’s Brookfield, and US-based Digital Realty is pledging around $11 billion toward an AI data centre in the same region.
Microsoft has also announced a $17.5 billion investment to expand AI infrastructure in India, describing it as the company’s biggest commitment in Asia.
The proposed ecosystem would span a 100-kilometre radius, aiming to integrate data centres, hardware suppliers, server manufacturers, and cooling technology providers into a single industrial cluster.
Aggressive Incentives And Infrastructure Expansion
To attract global capital, Andhra Pradesh is offering highly discounted land allocations, including symbolic one-cent-per-acre leases for strategic developments.
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State officials say the region captured nearly 25% of India’s foreign direct investment inflows in 2025.
The government is targeting six gigawatts of data centre capacity and has secured in-principle approval from New Delhi for six nuclear power plants at Kovvada to support the energy demands of the facilities.
Officials also say surplus monsoon water that typically flows into the Bay of Bengal could be redirected for cooling operations, a key concern for energy-intensive data infrastructure.
Balancing Optimism With Structural Challenges
While India ranks among the top global AI ecosystems, analysts caution that the country still faces limitations in high-performance computing capacity and advanced semiconductor access.
Questions have also been raised about whether large-scale data centres will create broad-based employment.
State leaders argue that technological revolutions historically generate net job growth when embraced early.
If executed at the proposed scale and speed, the Visakhapatnam project would represent one of the largest AI infrastructure bets outside the US and China, signaling India’s intention to compete not just in software talent, but in the physical backbone of artificial intelligence itself.
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