In a landmark move for India’s digital infrastructure, tech giant Google, under its parent company Alphabet, is reportedly set to invest $6 billion (approximately ₹52,000 crore) to establish a 1-gigawatt (GW) data centre in Visakhapatnam, Andhra Pradesh. This ambitious project, cited by multiple sources including Reuters, marks Google’s first direct investment in a data centre in India and is poised to be the largest of its kind in Asia in terms of both capacity and investment size. The initiative is part of Alphabet’s broader $75 billion global commitment to expand its data centre network in 2025, reflecting India’s growing strategic importance in the global digital economy.
Project Details and Scope
The Visakhapatnam data centre, described as a “hyperscale” facility, will be capable of housing tens of thousands of servers to support advanced cloud computing and artificial intelligence (AI) applications. The $6 billion investment includes $2 billion (approximately ₹17,000 crore) dedicated to developing renewable energy capacity to power the facility, aligning with Google’s global push for sustainable operations. This focus on green energy underscores the company’s commitment to addressing the high energy demands of data centres while minimizing environmental impact.
The project is expected to be part of a 500-acre “Data City” in Visakhapatnam’s Madhurawada region, with Google reportedly securing around 80 acres of land. The Andhra Pradesh government has outlined an ambitious goal to develop 6 GW of data centre capacity in the state over the next five years, with 1.6 GW already committed. Additionally, the state is working to establish three submarine cable landing stations in Visakhapatnam to enhance global connectivity, further positioning the region as a digital hub.
Strategic Importance for India
This investment comes at a pivotal time for India, which is witnessing a surge in demand for digital infrastructure driven by increased digitization, cloud adoption, and the rise of generative AI. Despite generating 20% of global data, India currently accounts for only 3% of global data centre capacity, highlighting significant growth potential. The Visakhapatnam facility is expected to bolster India’s position in the global digital economy by enhancing cloud computing capabilities, supporting AI-driven innovations, and creating opportunities for economic growth and employment in the region.
Google’s investment follows a Memorandum of Understanding (MoU) signed with the Andhra Pradesh government in December 2024 to explore collaboration on AI, digital infrastructure, and skill development. While Google has not yet issued an official statement confirming the investment, Andhra Pradesh’s Information Technology Minister, Nara Lokesh, indicated that further announcements are expected in October 2025. The state, which lost its former capital Hyderabad to Telangana in 2014, has been aggressively pursuing big-ticket investments to address financial challenges and establish itself as a data hub.
Competitive Landscape and Regional Expansion
Google’s move places it in direct competition with other global tech giants like Microsoft and Amazon Web Services (AWS), which have also been investing heavily in India’s data centre and cloud infrastructure. Google already operates cloud regions in Mumbai and Delhi, and this new facility will complement its existing operations. The Visakhapatnam project is part of Alphabet’s multi-billion-dollar expansion of its data centre portfolio across Asia, with similar initiatives underway in Singapore, Malaysia, and Thailand.
The investment also aligns with India’s broader data centre growth trajectory. According to industry reports, India’s data centre capacity is projected to double from 0.9 GW in 2023 to approximately 2 GW by 2026, driven by government policies like Digital India and data localization mandates. The cost of setting up data centres has risen, with the average cost per MW increasing to ₹60-70 crore, and the sector is expected to require ₹50,000 crore in capital expenditure over the next three years.
Economic and Environmental Implications
The Visakhapatnam data centre is expected to create significant economic benefits, including job opportunities in construction, operations, and related industries. By prioritizing renewable energy, the project also addresses environmental concerns associated with energy-intensive data centres. However, Andhra Pradesh officials have acknowledged that some coal power may be necessary to ensure 24/7 reliability, indicating a pragmatic approach to balancing sustainability with operational needs.
The timing of the investment coincides with global economic uncertainties, including a 25% tariff on India announced by US President Donald Trump on July 30, 2025. Despite these challenges, Alphabet reaffirmed its commitment to its $75 billion global data centre expansion plan in April 2025, signaling confidence in India’s long-term growth potential.
Challenges and Future Outlook
While the project holds immense promise, challenges remain. The high cost of data centre construction, regulatory complexities, and the need for reliable power infrastructure could pose hurdles. Additionally, the lack of an official confirmation from Google has led to some speculation, with further clarity expected in the coming months. Andhra Pradesh’s ambitious target of 6 GW of data centre capacity will require sustained investment and policy support to materialize.
Looking ahead, the Visakhapatnam data centre is set to transform Andhra Pradesh into a key player in India’s digital infrastructure landscape. By leveraging its strategic location, government backing, and Google’s technological expertise, the project could catalyze further investments in the region and solidify India’s role as a global leader in cloud and AI ecosystems.
Conclusion
Google’s reported ₹52,000 crore investment in Visakhapatnam represents a transformative step for India’s digital infrastructure. As the largest data centre in Asia, the facility will not only enhance India’s technological capabilities but also drive economic growth and sustainability efforts. With Andhra Pradesh positioning itself as a data hub and India’s data centre industry on a rapid growth trajectory, this project underscores the country’s rising prominence in the global digital economy. As the world awaits further details, the Visakhapatnam data centre promises to be a game-changer for India’s tech future.
