India’s Andhra Pradesh state is planning a massive AI-focused “data city” cluster around Visakhapatnam as part of a broader push to narrow the country’s Artificial Intelligence (AI) gap with the United States and China, according to state IT minister Nara Lokesh.
The proposed development envisions a large-scale digital and AI infrastructure ecosystem spanning a 100-kilometre radius around the port city, combining hyperscale data centres, submarine cable landings, AI compute infrastructure and manufacturing supply chains.
Speaking ahead of an AI summit in New Delhi, Lokesh said the state is positioning Visakhapatnam, also known as Vizag, as a central hub for India’s next phase of AI and digital infrastructure growth.
$175 billion investment commitments across AI and digital infrastructure
Lokesh said Andhra Pradesh has secured investment agreements worth about $175 billion across 760 projects, with a significant share tied to digital, AI and data centre infrastructure.
Among the largest announced commitments is a reported $15 billion investment by tech giant Google to build its largest AI infrastructure hub outside the United States in Visakhapatnam.
In parallel, a joint venture involving Reliance Industries, Brookfield and Digital Realty is investing about $11 billion to develop a major AI data centre campus in the same city.
The state is also promoting Visakhapatnam as a new landing point for submarine internet cables connecting India with Singapore and other regional hubs, aiming to strengthen international data connectivity alongside compute capacity.
Six-gigawatt data centre target and integrated supply chain push
The state government is targeting a total of six gigawatts of data centre capacity, with about three gigawatts already tied to signed agreements and the remainder in advanced stages of planning, according to Lokesh.
He said the “data city” model goes beyond server farms and connectivity to include upstream manufacturing and infrastructure suppliers.
The state is courting companies that build servers, cooling systems, and other core data centre equipment, with the goal of creating a full-stack infrastructure ecosystem rather than standalone facilities.
To attract large investors, Andhra Pradesh is offering highly subsidized land for anchor projects and fast-track approvals, betting that scale and speed will create competitive advantage.
Power and water planning for energy-intensive AI infrastructure
Addressing concerns about the heavy power and water demands of AI and hyperscale data centres, Lokesh said the state has mapped resource requirements in advance.
He pointed to planned nuclear capacity at Kovvada, where the central government has granted in-principle approval for multiple large reactors, as well as surplus seasonal water flows that can be redirected for industrial cooling instead of draining unused into the sea during monsoons.
India’s broader AI race intensifies
India currently ranks among the top tier of global AI ecosystems by composite indicators such as patents and private funding, according to assessments from Stanford University Institute for Human-Centered AI, but analysts say it still lags the U.S. and China in high-end compute access and frontier model development.
Global technology firms are stepping up AI infrastructure investments in the country. Microsoft recently announced plans to invest $17.5 billion in AI infrastructure in India, calling it its largest commitment in Asia.
Lokesh argued that large-scale AI and data infrastructure buildouts would generate long-term economic and employment gains, despite concerns that highly automated data centres create limited direct jobs.
Framing the project as part of a long-term industrial transformation, he said the state aims to execute AI and data infrastructure projects at unprecedented speed and scale, positioning Visakhapatnam as a cornerstone of India’s AI growth strategy.
