Google’s decision to build a mega AI data hub in Visakhapatnam is transformatory for India’s data centre sector. The California-based tech giant has committed to investing $15 billion over five years in the facility, which will be its largest data hub outside the US.
Making this commitment at a time when trade relations between the US and India are strained is, in itself, a vote of confidence in India. Google also faces antitrust challenges in India and an Indian lawsuit challenging YouTube’s AI policy. Indian policymakers have also been promoting local alternatives to Google’s cloud, Gmail and Google Maps. By ramping up its presence here, Google could be calculating on staving off these nascent threats.
The new hub may create 188,000 jobs – Google currently has around 14,000 employees in India. The buildout also involves Bharti Airtel and the Adani Group. AdaniConneX, a joint venture (JV) between Adani Enterprises and EdgeConneX, will co-develop the core infrastructure and invest in new transmission lines, clean energy generation and energy storage systems.
Airtel will build a new cable landing station (CLS) in Visakhapatnam to host new international subsea cables connecting to Google’s global infrastructure. That will also host Meta’s Project Waterworth global subsea system. Google’s Blue-Raman cable, which connects to Mumbai, is also expected to be up and running by end 2025.
Airtel will, moreover, supply an intra-city and intercity fibre network that will increase the capacity of India’s digital backbone. The new hub will offer a full stack of AI solutions, including Google’s custom Tensor Processing Units (TPUs), to enable local AI processing. Google will also provide access to its AI models – including Gemini – and its platform for building agents and applications, as well as supporting services such as Search, YouTube, Gmail and Google Ads.
This is a cornerstone investment for the Andhra Pradesh government, which has very ambitious plans to develop 6 GW of data centre capacity by 2029. India has just about 1.5 GW of data centre capacity at present, so Andhra Pradesh is pushing the envelope. This hub itself will scale to multi-gigawatt by 2030.
Data centres need enormous power as well as space to house the computing, networking and cooling equipment required to collect, process, store and distribute data. The Andhra Pradesh government has offered subsidised land and subsidised power and water rates. Other states are also offering similar incentives. Maharashtra, for example, is hosting an $8.3 billion cloud facility for Amazon.
This is part of the digital infrastructure required to create a $1 trillion digital economy by FY 2028. Apart from a pool of skilled labour, India has cheap data rates and a large, growing population of data consumers. Moreover, India’s Sovereign Cloud Policy, which pushes for data localisation, and the Digital Personal Data Protection Act and its accompanying rules offer corporates comfort in terms of data safety and security.
Amazon, Google and Microsoft – the big guns in cloud services – are all locating facilities in India, along with Indian companies such as Reliance and Airtel. Vizag, Mumbai, Chennai, Pune, Hyderabad, Delhi NCR, Bengaluru and Kolkata are among the locations seeking investment.
Mega projects such as Google’s AI hub should accelerate India’s AI mission. Vizag will help India learn to develop and deploy cutting-edge AI. In September, NITI Aayog estimated that AI could contribute an extra $500 billion-$600 billion to the economy by 2035.
The Google AI hub will provide the critical foundation to drive growth and enable businesses, researchers and creators to build and scale with AI. This should help India set the pace for innovation, digital inclusion and economic growth.
