Google announced on Tuesday that it would invest $15 billion over the next five years to establish an artificial intelligence data center in the southern Indian state of Andhra Pradesh. This marks Google’s largest investment in the world’s most populous nation to date.
The US tech giant’s plan comes amid a tense diplomatic standoff between New Delhi and Washington over tariffs and a stalled trade deal, as Prime Minister Narendra Modi has urged a boycott of foreign goods.
Indian infotech and finance ministers attended the New Delhi event where Google Cloud CEO Thomas Kurian stated that the data center in Andhra Pradesh would be the company’s “largest AI hub” outside the United States.
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“This long-term vision we have is to accelerate India’s own AI mission,” Kurian said.
Google has committed to spending about $85 billion this year to expand data center capacity as major tech companies invest heavily to build new infrastructure in their competition to meet the booming demand for AI services.
The data center campus in the port city of Visakhapatnam will have an initial capacity of 1 Gigawatt.
US-based multinationals face growing boycott calls in India, as business executives and Modi supporters have stoked anti-American sentiment to protest against the 50% tariff on imported Indian goods.
“This initiative creates substantial economic and societal opportunities for both India and the United States,” Google said in a statement, without referring to the tariffs.
In recent weeks, Indian officials have privately met with many executives of US companies to convey their commitment to providing an easy business environment despite the discontent over US tariffs, two sources told Reuters on condition of anonymity.
Microsoft and Amazon have already invested billions in building data centers in India, a critical growth market where nearly a billion users access the internet.
Indian billionaires Gautam Adani and Mukesh Ambani have also announced investments in building capacity for data centers.
Adani Group and India’s Airtel have partnered with Google to build the infrastructure for its new project, which also includes the construction of a new international subsea gateway.
AI requires enormous computing power, pushing demand for specialized data centers that enable tech companies to link thousands of chips together in clusters.
Earlier, state officials had estimated the investment at $10 billion for the center, which they said would generate 188,000 jobs.
Google parent company Alphabet Inc considers India a key growth market where its YouTube video services have the most users, and Android phones dominate smartphone usage.
However, the US firm has been facing many antitrust challenges in India over its business practices and also faces a lawsuit from a Bollywood couple challenging YouTube’s AI policy.
