India Plans Massive ‘Data City’ to Accelerate AI Ambitions

India Accelerates AI Push with Gigawatt-Scale Data Expansion

NEW DELHI — As India intensifies efforts to close the artificial intelligence gap with the United States and China, it is preparing to build a vast “data city” designed to power the country’s digital transformation on an unprecedented scale.

Leading the initiative is Nara Lokesh, information technology minister of Andhra Pradesh, who is positioning the coastal city of Visakhapatnam as a central hub in India’s AI expansion.

“The AI revolution is here no second thoughts about it,” Lokesh said ahead of an international AI summit in New Delhi. “As a nation, we have taken a stand that we’ve got to embrace it.”

A $175-Billion Investment Drive

Lokesh said Andhra Pradesh has secured investment agreements totaling $175 billion across 760 projects. Among the headline investments is Google’s $15-billion commitment to establish its largest AI infrastructure hub outside the United States.

In addition, a joint venture between India’s Reliance Industries, Canada’s Brookfield, and US-based Digital Realty is investing $11 billion to develop a major AI data center in Visakhapatnam, widely known as “Vizag.”

The port city of about two million residents is better known for hosting international cricket matches than for advanced technology. However, it is now being pitched as a strategic landing point for submarine internet cables connecting India to Singapore.

According to Lokesh, the planned data city will span a 100-kilometer radius roughly the width of Taiwan creating a tightly integrated digital ecosystem.

Beyond Data Centers

Lokesh emphasized that the project extends beyond building data centers. Andhra Pradesh is offering land to major investors at a nominal rate of one US cent per acre, aiming to attract companies across the entire AI infrastructure supply chain.

“It’s not just about the data centers,” he said. “I’m chasing the companies that make those servers that go sit in those data centers the companies that make the entire air conditioning, the water-cooling system the whole nine yards.”

The 43-year-old Stanford-educated minister is the son of Andhra Pradesh Chief Minister N. Chandrababu Naidu, who previously helped transform Hyderabad into a major tech hub known as “Cyberabad.” The state leadership is closely aligned with Prime Minister Narendra Modi, who is set to host the upcoming AI Impact Summit.

India’s Growing AI Presence

India currently ranks third in a global AI power index compiled by Stanford University’s Institute for Human-Centered AI, placing it ahead of South Korea and Japan based on metrics such as patents and private funding.

With more than a billion internet users, the country has become an attractive destination for global tech firms expanding generative AI services. In December, Microsoft announced a $17.5-billion investment to strengthen India’s AI infrastructure its largest investment in Asia to date.

Despite the surge in funding, critics argue that India still trails in access to advanced computing power and large-scale commercial AI deployment, remaining more of a consumer than a producer of cutting-edge AI technologies.

Questions have also been raised about whether data centers will generate substantial employment once operational. Lokesh dismissed those concerns.

“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.”

Learning from China

Lokesh said the state has accounted for the heavy electricity and water demands of the energy-intensive data center industry. He noted that Andhra Pradesh plans to utilize surplus monsoon water—much of which flows into the Bay of Bengal for cooling systems.

“It’s a crime that so much water during monsoons goes into our oceans,” he said.

He also cited China as a model, praising its rapid poverty reduction and strategic development of industrial clusters. Andhra Pradesh’s approach, he said, draws lessons from that experience.

With a target of six gigawatts of data center capacity three already secured and three more in the pipeline the state is banking on speed and scale to gain a competitive advantage. New Delhi has also granted in-principle approval for six 1.2-gigawatt nuclear power plants in Kovvada, Andhra Pradesh, to help meet future energy demands.

“We are on a journey,” Lokesh said. “We will execute these projects at a pace that the country has never seen.”