India Launches Massive AI Data City in Visakhapatnam

The government of Andhra Pradesh is developing a massive AI "data city" centered in Visakhapatnam to bridge the artificial intelligence gap between India and the United States and China. Led by IT Minister Nara Lokesh, the project envisions a 100-kilometer radius ecosystem encompassing data centers, server manufacturing, and cooling systems that will utilize surplus monsoon water from the Bay of Bengal. The state is attracting global investment by offering land at one US cent per acre, securing $175 billion across 760 projects. Key commitments include $15 billion from Google for its largest AI hub outside the U.S., $17.5 billion from Microsoft, and an $11 billion joint venture involving Reliance Industries, Brookfield, and Digital Realty.

To support the six gigawatts of targeted data center capacity, New Delhi granted in-principle approval for six 1.2 GW nuclear power plants at Kovvada. The city is also designed as a landing point for submarine internet cables linking India to Singapore.

These developments coincide with Prime Minister Narendra Modi hosting the Global AI Impact Summit in New Delhi. Modi has positioned India as a global digital infrastructure hub, with the national budget introducing tax incentives and potential tax holidays until 2047 for global companies that route foreign cloud workloads through Indian data centers. Data-center services are now also eligible for Safe Harbour Rules with a 15 per cent margin.