India Unveils Massive ‘Data City’ Plan in Andhra Pradesh to Boost Global AI Ambitions

India has announced an ambitious “Data City” project in Visakhapatnam, Andhra Pradesh, aiming to narrow the technological gap with the United States and China in artificial intelligence. The state government has unveiled plans to develop a large-scale ecosystem of data centers, AI infrastructure, and digital supply chains, positioning the coastal city as a major technology hub in South Asia.

The initiative is being led by the Government of Andhra Pradesh, with strong backing from state leadership. Information Technology Minister Nara Lokesh said the AI revolution is no longer optional but inevitable, and that India must actively shape its future. According to him, the state has already secured investment commitments worth around $175 billion across 760 projects.

A major highlight of the plan is a $15 billion investment by Google to build what officials describe as the largest AI infrastructure hub outside the United States. In parallel, a joint venture involving Reliance Industries, Brookfield Asset Management, and Digital Realty is developing an $11 billion AI-focused data center facility in the same city.

Visakhapatnam, home to around two million people, is also being developed as a landing point for submarine internet cables connecting India to Singapore and other global networks. Officials say this will significantly improve international connectivity, making the city more attractive for cloud computing, AI research, and digital services.

Lokesh explained that the “Data City” will extend across a 100-kilometer radius and will go beyond basic data storage. The project will include server manufacturing, advanced cooling systems, component supply industries, and full-scale technology logistics networks. The aim is to build a self-sustaining digital ecosystem rather than isolated data centers.

The state government claims that Andhra Pradesh attracted nearly 25 percent of India’s total foreign direct investment in 2025. To maintain this momentum, authorities are offering land to major investors at competitive rates and simplifying regulatory procedures. Lokesh, a Stanford-educated leader and son of former chief minister N. Chandrababu Naidu, says he is drawing inspiration from Hyderabad’s transformation into “Cyberabad” two decades ago.

The announcement comes ahead of an AI Impact Summit to be hosted by Prime Minister Narendra Modi, reinforcing India’s ambition to become the world’s third-largest AI power. A recent study by Stanford University found that India ranks ahead of South Korea and Japan in more than 40 indicators, including patents and private AI investment.

India’s vast digital market is also driving global interest. With more than one billion internet users, the country offers unmatched scale for technology firms. Recently, Microsoft announced a $17.5 billion investment in India, calling it its largest-ever commitment in Asia.

Despite the optimism, critics argue that India still lags behind global leaders in high-performance computing and large-scale commercial AI deployment. Some experts also question whether data centers, which are highly capital-intensive but labor-light, will generate sufficient employment for local communities.

Responding to such concerns, Lokesh said every industrial revolution has created more opportunities than displacement. He argued that countries embracing AI early will gain long-term economic and strategic advantages, while those that delay will fall behind.

Energy and water requirements remain among the biggest challenges for the project. Data centers consume enormous amounts of electricity and cooling resources. To address this, the state plans to utilize excess monsoon water flowing into the Bay of Bengal for cooling purposes. In addition, the central government has given in-principle approval for six nuclear power units of 1.2 gigawatts each in Kovvada to support long-term energy needs.

Andhra Pradesh has set a target of developing six gigawatts of data center capacity in the coming years. Officials say project execution will be fast-tracked through special task forces and streamlined approvals. “We are moving at a pace the country has never seen before,” Lokesh said, emphasizing large-scale and rapid implementation.

Analysts view the Visakhapatnam Data City as a strategic bet on India’s digital future. If successfully implemented, it could reshape the country’s position in global AI infrastructure and cloud computing. However, they caution that sustained policy stability, reliable power supply, skilled manpower, and environmental safeguards will be crucial for long-term success.

For now, the project signals India’s intent to compete at the highest level of the global technology race. By combining large investments, policy support, and digital scale, the government hopes to turn Visakhapatnam into a cornerstone of the country’s AI-driven growth strategy.