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Google’s announcement of a USD 15-billion investment to establish an Artificial Intelligence (AI) data centre in Visakhapatnam marks a transformational moment in India’s digital infrastructure landscape. The initiative, the largest single investment by Google in India, comes amid a geo-economic context of recalibrating India-US relations and the government’s emphasis on technological self-reliance and swadeshi digital systems. The project positions India as an emerging hub in global AI capability and computing power.

Why AI Data Centres Matter

AI-focused data centres differ fundamentally from conventional facilities. While traditional data centres are built around CPU-based servers to support cloud storage, websites, and enterprise applications, AI data centres rely on high-performance GPUs to handle data-heavy and compute-intensive workloads such as generative AI, advanced analytics, image/video processing, and deep-learning models. This makes them significantly more power-intensive and infrastructure-demanding, requiring robust energy supply and advanced cooling systems.

According to estimates cited by Google, the Visakhapatnam AI hub is expected to add at least USD 15 billion to the US GDP between 2026 and 2030 through increased AI adoption and cloud-driven activity, demonstrating the cross-border economic impact of such investments.

Partnerships and Green Infrastructure

The facility is being developed in partnership with AdaniConneX and Airtel, leveraging the same backbone used for Google’s global platforms like Search, YouTube, and Workspace. The project includes building a major subsea cable landing station, linking eastern India to Google’s expansive global cable network, enhancing international data routes and reducing latency.

A key dimension of the partnership lies in sustainable power and energy independence. AdaniConneX, a joint venture between Adani Enterprises and EdgeConneX, will provide 100% clean energy, supported by new transmission lines, renewable generation, and energy storage facilities in Andhra Pradesh. This aligns with India’s climate commitments and enhances grid resilience.

Economic Impact and Capacity Expansion

India’s data centre industry, currently valued at ~USD 10 billion with USD 1.2 billion in FY24 revenue, is projected to add 795 MW of capacity by 2027 — reaching 1.8 GW. Google’s project alone is expected to generate nearly 1.88 lakh direct and indirect jobs, strengthening regional development and high-skilled employment.

However, high capital costs and limited job intensity remain policy concerns. Approximately 40% of capex in data centres goes towards electrical systems, and 65% of operating costs are attributed to electricity, with ~?60–70 crore required per MW of capacity. This necessitates a careful assessment of incentives and long-term strategic benefits.

Energy Security and the Nuclear Option

The International Energy Agency (IEA) predicts that global data-centre electricity demand may double by 2026, raising questions around sustainability. While renewable energy remains the mainstay, its intermittency has prompted policy consideration of nuclear energy as a round-the-clock clean power source — a trend already visible in the United States and now emerging in India’s energy strategy.

Conclusion

Google’s AI hub in Visakhapatnam represents a strategic convergence of digital infrastructure, clean-energy innovation, and global technological cooperation. For India, it underscores the dual challenge of expanding digital capability while ensuring energy security and environmental sustainability. The success of this initiative will influence India’s journey toward becoming a global digital superpower underpinned by resilient, sovereign, and sustainable compute ecosystems.