India Plans ‘Data City’ to Power AI Revolution on Staggering Scale

India is poised to take center stage in the global AI race, with its ambitious plans for an unprecedented “data city” positioned as a cornerstone of digital innovation. Information technology minister Nara Lokesh, who is spearheading this project from Andhra Pradesh state, sees AI not just as a trend but as a necessity. He insists, “We have taken a stand that we’ve got to embrace it,” he told AFP ahead of an upcoming international AI summit in New Delhi.

Andra Pradesh’s vision for Visakhapatnam, a coastal city with around two million inhabitants and historically known more for its cricket grounds than high-tech prowess, has shifted dramatically. The state is now positioned as a pivotal nexus for submarine internet cables linking India to Singapore. “The data city” is set to be a single ecosystem encompassing 100 kilometers from the proposed site, with Taiwan’s width serving as a comparison scale.

Lokesh revealed that Andhra Pradesh has already secured $175 billion in investment agreements for over 760 projects, including a significant $15 billion commitment from Google. The city is also witnessing major collaborations between local enterprises and international players. A joint venture between Reliance Industries, Brookfield of Canada, and Digital Realty from the United States is investing $11 billion to build an AI data center.

The minister’s vision extends beyond mere connectivity; he envisions a comprehensive transformation through various sectors. “We have received close to 25% of all foreign direct investments in India in 2025,” Lokesh noted, emphasizing Andhra Pradesh’s strategic role as a magnet for global capital. He explained that the state had offered land at just one US cent per acre (three per hectare) for major investors, targeting companies from cutting-edge server manufacturers to air conditioning specialists.

“Every industrial revolution has always created more jobs than it displaced,” Lokesh asserts with conviction. “But it’s happening in countries that embraced these revolutions.”

The minister’s argument is bolstered by his own state’s history: Under Chandrababu Naidu, Hyderabad became a major technology hub dubbed “Cyberabad.” India now ranks third globally in AI power, just above South Korea and Japan, according to Stanford University’s Institute for Human-Centered AI. More than 40 indicators are considered, including patents and private funding.

Microsoft’s $17.5 billion investment underscores the country’s growing importance as a market for generative AI players seeking to penetrate India, with CEO Satya Nadella describing it as Microsoft’s “largest ever Asian investment.”

However, critics point out that India lags behind in accessing high-end computing power and commercial deployment of AI. Some also question if data centers will yield meaningful employment once operational.

Lokesh counters this skepticism by highlighting the economic benefits projected to flow from his state’s ambitious plans, including the promise of surplus water from the Bay of Bengal for cooling massive data centers. “It’s a crime that so much water during monsoons goes into our oceans,” he said. “But with surplus water available, we can make this happen.”

China stands out as an example of rapid industrialization and poverty reduction through technology adoption. Andhra Pradesh has acknowledged China’s model and aims to emulate it by accelerating the creation of industrial clusters and embracing its own vision for a robust AI ecosystem.

The state is set to achieve six gigawatts of data center capacity, with three already under contract and another three in development. “We are on a journey,” Lokesh declared, outlining his goal for swift execution of these ambitious projects—a pace unprecedented in the country’s history.

As India charts its path towards becoming an AI leader, it seeks to transform Visakhapatnam into a hub that will not only facilitate rapid connectivity but also foster innovation across multiple sectors. With plans encompassing industrial growth and strategic partnerships, Andhra Pradesh is positioning itself for significant influence on the global stage of artificial intelligence.