India emerging as key hub for data centres, chip manufacturing: Moody's

Developed and emerging economies in East and Southeast Asia are key targets for AI investments, with India, Singapore and Malaysia rapidly establishing themselves as prime destinations for data centre projects or chip manufacturing, Moody's Analytics said on Wednesday.

In its report titled AI Is Beating the Odds, Moody's Analytics said at a time when cross-border investment is slowing and global trade is fracturing, spending on artificial intelligence (AI) is powering against the current.

"Even though trade and geopolitical tensions are knocking economies, soaring AI demand is outpacing supply. To close the gap, global investors are pouring capital into data centres and semiconductor projects," it said.

The report further said that the US share of outbound AI investment outpaces its inbound share, a sign that US tech giants are expanding their global footprint.

"Developed and emerging economies in East and Southeast Asia are key destinations. In particular, India, Singapore and Malaysia are rapidly establishing themselves as prime destinations for data centre projects or chip manufacturing. These markets offer cost advantages, growing demand and supportive policies for tech investment," Moody's Analytics said.

India's growing economy and digital talent pool make it an attractive location for data centre providers and chip production, it added.