Google to lift India's data hub plan above $15 billion, says Naidu

Don't want to miss the best from Business Standard?

By Daniel Ten Kate and Siddhartha Singh

 

Alphabet Inc.’s Google is expected to boost its investment in Andhra Pradesh beyond $15 billion after five years, according to the leader of the southern Indian state. 

 

Speaking in an interview on Saturday in the port city of Visakhapatnam, Chief Minister N. Chandrababu Naidu said the US-based company’s plans to build a data center in the state is “to start with.” Asked if Google would look to double its investment after the initial five-year period, he said: “It is always an opportunity under their compulsions.” 

 

“It is a win-win situation to start with $15 billion within five years,” Naidu said of Google’s plans.

 

He added that Andhra Pradesh has commitments to build 5.5 GW of data centers from companies including Reliance Industries Ltd. That will go along with plans to ramp up green energy production, he said. 

 

“This data flow is cost-effective compared to consumption of power,” Naidu said. “That is the game changer. Now everybody is coming to Andhra Pradesh.” 

 

“It is going to become a global hub for data centers,” he added.

 

Google last month announced the data center in Visakhapatnam linked to new energy sources and a fiber-optic network. Indian tycoon Gautam Adani said his company AdaniConneX would partner with Google on the project, along with Bharti Airtel, the country’s No. 2 wireless carrier.

 

Google has said the project is its biggest investment in India to date, and will anchor the regional government’s plan to accelerate the AI industry locally. 

 

Representatives for Google didn’t immediately respond to Naidu’s comments on Saturday.

 

Google has joined fellow US tech leaders in investing in India, one of the biggest beneficiaries of a worldwide AI boom. Amazon.com Inc. plans to invest $12.7 billion to build cloud infrastructure in the South Asian country by 2030, while ChatGPT-creator OpenAI is seeking to set up a 1-gigawatt data center in the region. Investments in India’s data center market are expected to top $100 billion by 2027, according to CBRE Group Inc. 

 

Goldman Sachs Research estimates the world will have around 122 GW of data center capacity online by the end of 2030. As data centers contribute to a growing need for power, it estimates the electric grid will require about $720 billion of grid spending through 2030.

 

Indian Prime Minister Narendra Modi has hailed technology as key to bolstering the domestic economy and lifting millions out of poverty. But the nation is confronting challenges to his ambitions for a build-out, with limited water resources and unreliable electricity service remaining significant bottlenecks. 

 

Naidu is targeting an economic growth rate of 15 per cent for the state and is looking to attract $1 trillion over the next 10 years.

 

Naidu’s regional Telugu Desam Party is also key to the stability of Modi’s ruling coalition in New Delhi. The Andhra Pradesh leader noted the landslide victory of Modi’s party in a state election in Bihar that announced results this week, hailing the national government as “very strong, very stable.” 

 

“Winning the election is a message for the global community and also local people,” Naidu said. “Local people will move very fast because of stability.”