Google Plans $15 Billion Data Center in Biggest India Bet

(Bloomberg) — Alphabet Inc.’s (GOOG, GOOGL) Google aims to invest about $15 billion building an AI infrastructure hub in southern India over the next five years, making its biggest bet on the fast-growing country.

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The US company outlined plans Tuesday for a data center in the port city of Visakhapatnam linked to new energy sources and a fiber-optic network. Indian tycoon Gautam Adani said his company AdaniConneX would partner with Google on the project, along with Bharti Airtel (BHARTIARTL-BL.NS), the country’s No. 2 wireless carrier.

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Google’s biggest investment in India to date, the project will anchor the regional government’s plan to accelerate the AI industry locally, the US company said in a statement. The Indian state of Andhra Pradesh aims to host 6 gigawatts of data center capacity by 2029, Nara Lokesh, the region’s technology minister, told Bloomberg News.

Google joins fellow US tech leaders in investing in India, one of the biggest beneficiaries of a worldwide AI boom. Amazon.com Inc. plans to invest $12.7 billion to build cloud infrastructure in the South Asian country by 2030, while ChatGPT-creator OpenAI is seeking to set up a 1-gigawatt data center in the region. Investments in the country’s data center market are expected to top $100 billion by 2027, according to CBRE Group Inc.The Google Ananta campus in Bengaluru, India.

Lokesh said the Visakhapatnam data center alone represented an investment of more than $10 billion from Google. “It’s not just about the jobs,” said Lokesh, the son of Andhra Pradesh Chief Minister Nara Chandrababu Naidu. “It’s about the larger ripple effect that it creates, the economic activity it creates.”

Indian Prime Minister Narendra Modi has hailed technology as key to bolstering the country’s economy and lifting millions out of poverty. But the nation is confronting challenges to his ambitions for a build-out, with limited water resources and unreliable electricity service remaining significant bottlenecks.

Lokesh’s regional Telugu Desam Party, which his father leads, is a large part of Modi’s plan. The government in Andhra Pradesh offers subsidized land and power for new industrial ventures. In the late 1990s, Naidu earned a reputation as a visionary as he helped transform his capital city of Hyderabad into a tech metropolis that today hosts huge campuses for the likes of Microsoft Corp. and Oracle Corp.

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The party is now trying to leverage its influence to secure favorable federal policies for companies investing in Andhra Pradesh.

“We are willing to have conversations which might even require policy intervention at the federal level,” Lokesh said, characterizing the strategy as a “double engine, a bullet train.”

The AI hub is “designed to provide a full AI infrastructure, and it is designed to serve not just our own needs, but the needs of entrepreneurs, enterprises, and commercial organizations here in India,” Thomas Kurian, Chief Executive Officer of Google Cloud, told reporters in New Delhi.

—With assistance from Nasreen Seria.

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