India plans massive 'data city' to fuel its global AI ambitions

India is developing a massive "data city" in Visakhapatnam to bridge the artificial intelligence gap with the United States and China.

Nara Lokesh, the Information Technology Minister for Andhra Pradesh, is spearheading the initiative. He announced that the state has already secured $175 billion in investment agreements across 760 different projects.

The project includes a $15 billion commitment from Google to build its largest AI infrastructure center outside of the United States. Additionally, a joint venture between India’s Reliance Industries, Canada’s Brookfield, and the U.S.-based Digital Realty is investing $11 billion in a local AI data center.

Officials are positioning the port city of Visakhapatnam as a critical landing hub for undersea fiber optic cables connecting India to Singapore. The plan establishes a 100-kilometer ecosystem that integrates data centers with server manufacturing and specialized cooling system facilities.

To attract major investors, the state government is offering land at a subsidized rate of just one U.S. cent per acre.

The expansion comes as India seeks to cement its status as a global tech power. According to a study by Stanford University, India currently ranks third globally in AI capacity.

India’s ambitious move to establish a "Data City" in Visakhapatnam represents a high-stakes pivot in the country's techno-economic strategy. This initiative aims to transcend basic infrastructure, seeking instead to cultivate a comprehensive AI ecosystem by directly adopting the industrial cluster model pioneered by China. IT Minister Nara Lokesh’s public acknowledgment of this "China-inspired" framework signals a shift toward radical pragmatism, prioritizing economic velocity and execution over geopolitical sensitivities.

For the broader region, this development poses a direct competitive threat. While Southeast Asian nations, most notably Vietnam, have been aggressively courting foreign direct investment (FDI) to bolster their digital economies and semiconductor footprints, India is significantly raising the stakes. The massive scale of recent commitments from U.S. tech titans—including Google’s $15 billion and Microsoft’s $17.5 billion investments—sets a formidable benchmark for regional competitors. India’s primary advantages remain its internal market of over one billion internet users and a rare alignment between central and state-level industrial policy.

The success of the Visakhapatnam project is poised to redraw Asia’s technological map. It places immense pressure on neighbors like Vietnam to move beyond incrementalism and implement more aggressive regulatory and fiscal reforms. Failure to do so risks a consolidation of high-tech capital in India, as the subcontinent asserts its intent to evolve from a global back-office into a primary architect of artificial intelligence.