Google to invest USD 15 billion in an AI hub and data centre in Visakhapatnam, Andhra Pradesh, boosting India’s IT sector, creating jobs, promoting data localization, and strengthening Indo-US tech and economic ties over the next five years.
New Delhi: Alphabet Inc’s Google on Tuesday announced one of its biggest investments in South Asia — a USD 15 billion plan to build a massive data centre and artificial intelligence (AI) hub in Andhra Pradesh over the next five years.
The project, which will be developed in Visakhapatnam, marks a significant step in India’s growing role in the global AI and cloud ecosystem.
Google CEO Sundar Pichai briefed Prime Minister Narendra Modi on the company’s plans for the AI hub, which will be established in collaboration with the Adani Group. The Visakhapatnam facility is expected to become Google’s largest AI hub outside the United States.
Announcing the initiative on X, Pichai added: “This hub combines gigawatt-scale compute capacity, a new international subsea gateway, and large-scale energy infrastructure. Through it we will bring our industry-leading technology to enterprises and users in India, accelerating AI innovation and driving growth across the country.”
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The agreement between Google and the Andhra Pradesh government was formally signed on Tuesday, signaling a major boost for the state’s tech and digital infrastructure ambitions.
Meanwhile, PM Narendra Modi too expressed delight over the partnership stating, “This multi-faceted investment that includes gigawatt-scale data center infrastructure, aligns with our vision to build a Viksit Bharat. It will be a powerful force in democratizing technology. It will also ensure AI for All, delivering cutting-edge tools to our citizens, boosting our digital economy and securing India’s place as a global technology leader!”
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A Boost for Indian IT Sector
Asianet Newsable English spoke to business and economic experts to understand the impact of Google’s massive investment in Andhra Pradesh on the Indian economy.
Prakash Chawla, a commentator on business and the Indian economy, said the data centre and AI hub could provide a much-needed boost to the Indian IT sector, which he described as facing a crisis in innovation.
“Google’s announcement about its mega investment of USD 15 billion in a data centre hub in Visakhapatnam would be a shot in the arm for the Indian IT sector which is in the midst of a crisis of sorts. While the Indian IT companies seem to have missed the bus in innovation and development of cutting edge technologies around artificial intelligence, data centres offer them a catch-up opportunity to be a critical part of the AI revolution. Google too requires a lot of catch up when it comes to the global frenzy around AI,” Chawla said.
“AI needs mammoth size data centres to dig out solutions in several languages and complexities. India can rightfully boast of high quality skills and technology infrastructure to enable world class AI packages. Data centres, at least in part,can make up for job disruption in traditional IT services with the right kind of investment in skill development. One only hopes such a big investment by Alphabet does not get embroiled in the tariff tussle at play in a brazen manner,” Chawla added.
Strengthening Indo-US Tech Ties
Meanwhile, Shishu Ranjan, Vice President of the Independent Validation Unit (Model Risk) at Barclays, highlighted how the move reflects strong Indo-US relations, creates employment opportunities, encourages further tech investments, supports data localization, and strengthens India’s AI ecosystem.
“Google announcement to invest $15 billion on AI data centre in India is very significant economic decision as it came amid the heightened tension between Indo-US relationship due to imposition of high tariff on Indian goods entering US markets and US president Donald Trump announcing very high H1B visa fees impacting Indian skilled workforce aspiring to move to USA as well as Indian firms catering to US clients using Indian workforce on short term work visa permit,” Ranjan said.
“This decision also signifies the strong Indo-US relationship in the field of technology as well as economy which have been on a growth path since dot-com boom during early 1990s,” he added.
He explained how global IT firms, including Google, leverage their Global Capability Centres (GCCs) in India not just for business and knowledge processing, but also for high-value research and development, and how scaling up these operations benefits the Indian economy.
“Global IT tech firms have strong presence in India through their Global Capacity Centres (GCC), which they utilise not only for Business processing or Knowledge processing, but also for high value research and development. The growth in GCC is driven by the economic factors such as improved basic infrastructure, high speed internet services, and digital India infrastructure to support robust growth in IT and ITES, and availability of skilled and semi-skilled Human Resources,” Ranjan noted.
“Google already has a strong presence in India through its GCC unit in Hyderabad and other Indian cities. Their decision to upscale their investment brings them the benefits of economies of scale as they can leverage high skilled Human Resource at lower cost. Their investment decision brings a number of benefits to Indian economy,” he added.
Economic and Strategic Benefits of Google’s AI Investment for India
Shishu Ranjan also highlighted the multiple economic and strategic benefits of Google’s AI data centre investment in India, from job creation and boosting GDP to promoting data localization, fostering innovation, and strengthening the long-term Indo-US technological partnership.
“One, it would create huge employment opportunity directly and indirectly. For direct employment, it would leverage skilled workforce for AI data centres and semi-skilled workforce to cater to its ancillary services like office space management, transport services, hospitality, etc. Indirectly, it will create opportunity for its vendors as it would many type of services in order to efficiently run its data centre,” he said.
“Two, Google as a global technological giant investing in India for its AI data centre induces other tech firms to follow and therefore, would have a positive impact on India’s investment, services output and exports. This would push up the GDP growth rate and will be resulting in multiplier effect for the Indian economy,” Ranjan added.
“Three, Google opening its data centre is also a step towards data localization for which Indian government has been pushing in order to ensure national security as next generation war fares are going to be dependent on AI based technology and information system,” he said.
“Four, localization of data centre in India would lower the data management cost and therefore, have a positive spillover effect on research and innovation capacity within the Indian economic system. It can turn into a game changer for AI based start-ups as they can leverage the improved capabilities in AI space resulting from this investment over a time,” Ranjan stated.
“Lastly, this investment also provides opportunity for Indian tech firms to leverage the technology through learn, execute and innovate model. For example, India has Flipkart because US has Amazon or India has Ola because Indian worked in Uber,” he added.
“Overall, Google high ticket investment signifies the long term strategic partnership that India and USA enjoys. Indo-US partnership would be further strengthen basis investment in technological and economic space that is mutually beneficial for collaborating firms and Google has just done this through this announcement,” Ranjan concluded.