On October 14, Google announced a significant investment of $15 billion aimed at establishing a data center and an international subsea gateway in Visakhapatnam, India. This initiative is aligned with Andhra Pradesh's ambitious goal of reaching 6GW of data center capacity by 2029, with a commitment to entirely using green energy for its operations. Preeti Lobana, Google India's country manager, emphasized that this investment is about transforming lives rather than merely focusing on financial gains. This project is a culmination of over a year of collaboration with political leaders such as Chief Minister Chandrababu Naidu and Minister Nara Lokesh, showcasing Google's commitment to working closely with the local ecosystem.
In addition to data center development, Google is set to enhance its support for local businesses by offering its artificial intelligence (AI) capabilities, including the lightweight open-source language models known as Gemma. The company also plans to provide computing capacity and cloud credits to facilitate the adoption of AI technologies among local enterprises and governmental bodies. Despite increasing competition from both Indian and multinational corporations in the data center and AI sectors, Google claims to maintain a lead in its AI initiatives and partnerships with local governments.
The competition among tech giants to establish data centers in India has been intensifying, with significant commitments from other entities like Tata Group and Reliance Industries amounting to $28 billion. Google and its major rivals—Microsoft and Amazon—have collectively committed around $25 billion thus far. Noteworthy is OpenAI’s expansion into India, as they seek to tap into this growing market by launching new services and setting up a local office.
Lobana remains confident in Google's position, noting that while competitors may have specific models or chips, Google provides a comprehensive stack of AI solutions. This investment is viewed as foundational, akin to the establishment of electricity grids or railroads in the past, crucial for meeting the escalating demand for computational resources. Currently, seven of Google’s services boast over two billion users, while fifteen others attract at least half a billion users each.
Moreover, Google is keen to invest in Indian AI startups, providing not just financial resources but also mentoring through initiatives like the ministry of electronics and information technology’s Startup Hub. This commitment includes the recent launch of the “AI First” accelerator program, which supports innovative startups across various sectors.
Despite Google’s ambitious plans, experts note that India's data center market still faces challenges. Although the country generates a substantial 20% of global data, it holds only 5.5% of the world's data center capacity. Analysts have indicated that while there is a significant demand for domestic data centers, India's potential to become a connectivity hub for South Asia and the Middle East is substantial, provided that cross-border connectivity continues to improve. This could further enhance India's competitive advantage in the global data center landscape.