India’s AI ‘Data City’ Ambition: What It Means for Global Investors and Tech Entrepreneurs
New Delhi – As India strives to close the artificial intelligence gap with the United States and China, it is embarking on an ambitious project to build a massive new “data city” to drive digital growth on an unprecedented scale, according to Nara Lokesh, the information technology minister for Andhra Pradesh state.
“The AI revolution is here, no second thoughts about it,” Lokesh affirmed, emphasizing Andhra Pradesh’s city of Visakhapatnam as a strategic hub for India’s AI ambitions. Speaking to AFP ahead of an international AI summit next week in New Delhi, he stressed the nation’s commitment to embracing this technological shift.
Andhra Pradesh has already secured investment agreements totaling $175 billion for 760 projects. This includes a $15 billion investment by Google to establish its largest AI infrastructure hub outside the United States. Additionally, a joint venture involving India’s Reliance Industries, Canada’s Brookfield, and US firm Digital Realty is investing $11 billion to create an AI data center in Visakhapatnam.
Visakhapatnam, also known as “Vizag,” is home to approximately two million people and is traditionally recognized for its cricket stadium rather than technology. However, it is now being positioned as a key landing point for submarine internet cables connecting India with Singapore.
Lokesh outlined the ambitious scope of the data city, describing it as an integrated ecosystem spanning a 100-kilometer (60-mile) radius—comparable in size to Taiwan. He highlighted that Andhra Pradesh attracted nearly 25 percent of all foreign direct investments in India in 2025.
“This is about more than just data centers,” Lokesh said, revealing the state’s offer of land at just one US cent per acre (three cents per hectare) to major tech investors. “I’m targeting companies that manufacture servers, air conditioning, water cooling systems—the whole nine yards.”
Lokesh, 43, is Stanford-educated and the son of Andhra Pradesh Chief Minister N. Chandrababu Naidu, who played a pivotal role in developing Hyderabad’s “Cyberabad” tech hub. Both are allies of Prime Minister Narendra Modi, who will host the AI Impact Summit starting Monday.
India currently ranks third in the global AI power index, surpassing South Korea and Japan, as measured by more than 40 indicators including patents and private funding, according to Stanford University’s Institute for Human-Centered AI. With over a billion internet users, India is attracting significant interest from generative AI companies looking to tap its vast market.
In December, Microsoft announced a $17.5 billion investment to bolster India’s AI infrastructure, marking its largest-ever investment in Asia. However, critics argue India still trails in access to advanced computing power and commercial AI deployment, remaining more of a consumer than a creator of cutting-edge AI technology.
Some question whether data centers will generate substantial employment, a concern Lokesh dismisses. “Every industrial revolution has always created more jobs than it has displaced,” he said. “But those jobs have been created only in countries that have embraced the industrial revolution.”
Lokesh also stressed that the state’s provision of land at minimal cost will be offset by job creation and economic growth. Infrastructure demands, like electricity and water, have been carefully planned, with surplus water from monsoon runoff into the Bay of Bengal designated for cooling the energy-intensive data centers.
Citing China as a model, he praised how the country quickly lifted millions out of poverty through systematic industrialization and said Andhra Pradesh’s approach to building industrial clusters was inspired by China’s success.
With a target of six gigawatts of data center capacity—three already secured and three more forthcoming—Andhra Pradesh aims to gain a competitive advantage through speed and scale. The central government granted “in-principle approval” last year for six 1.2 GW nuclear power plants at Kovvada, Andhra Pradesh, to support this growth.
“We are on a journey,” Lokesh concluded. “We will execute these projects at a pace the country has never seen.”
Special Analysis by Omanet | Navigate Oman’s Market
India’s ambitious development of a vast AI-driven “data city” in Andhra Pradesh, backed by $175 billion in investments and tech giants like Google and Microsoft, signals a monumental leap in digital infrastructure. For businesses in Oman, this presents a strategic opportunity to tap into India’s booming AI ecosystem through collaborations, data-driven ventures, or tech outsourcing partnerships. Smart investors should consider positioning themselves early in AI adoption and regional digital infrastructure to harness the ripple effects of India’s accelerated AI industrialization and emerging tech clusters.
