Google is set to invest $15 billionin building one of India’s largest AI data centre campuses in Visakhapatnam, Andhra Pradesh. This has left the tech community in other states, viz Karnataka, Tamil Nadu, or Maharashtra, curious about the tech giant’s choice.
This investment will bring numerous benefits in the long term to both Google and India, said Ankush Sabharwal, founder of Corover.ai, an AI startup backed by Google. “It'll create opportunities for the local economy, drive growth, and position India as a major player in the global digital landscape,” he told AIM.
Politicians couldn't keep away from the discussion either. K Sudhakar, an opposition MP from Karnataka, said once preferred destinations for tech giants are losing ground due to government apathy and policy paralysis. In a post on X, he stated that Andhra Pradesh will create over 100,000 new jobs, leaving Karnataka to watch as opportunities and innovation hubs move elsewhere.
Sudhakar alleged that the state’s hard-earned reputation, built over decades of visionary leadership and investor-friendly policies, is being squandered.
According to Mohan Das Pai, former CFO and board member at Infosys, Andhra left Karnataka behind due to its leadership, vision, and aggressive execution.
“Babu is the differentiator between any state getting business,” Pai told AIM, referring to Andhra Pradesh chief minister N Chandrababu Naidu. “He meets people, commits on the spot, and delivers. Karnataka doesn’t have anybody like Babu.”
Pai believes Naidu’s proactive engagement with investors and deep understanding of technology ecosystems gave Andhra a decisive edge. “He understands business and acts fast,” he said.
Among other factors, Visakhapatnam’s access to undersea cable landing stations gives it a natural advantage for hosting large-scale data centres. “For a data centre, you need a submarine cable landing point. Visakhapatnam, being on the sea, is a natural choice,” Pai said. He added that Karnataka overlooked Mangaluru’s similar potential.
What Andhra Pradesh is Doing Right?
Nara Lokesh, Andhra Pradesh IT minister, recently told Moneycontrol that the state has created a framework that enables companies like Google to scale quickly while ensuring long-term economic benefits for the region.
He clarified that, contrary to speculation, the land provided to Google for its AI data centre was not free, but allocated at a mutually agreed market price. He added that the state’s 99 Paise Land model, now implemented through the LIFT (Land Investment and Facilitation) policy, has been instrumental in attracting large-scale investments.
“The land is only one component, the talent pool and ecosystem are equally crucial,” he said.
The minister said that the state promotes a diverse energy mix that includes renewables, pump storage projects, and battery storage, while maintaining a small base load from thermal energy. This approach has already helped reduce power prices by 13% across the state. Water security is being addressed through ambitious river interlinking projects, ensuring adequate supply for industrial needs.
Job creation remains central to Andhra Pradesh’s strategy. Lokesh said that each gigawatt of data centre capacity could generate 200,000 direct and indirect jobs, and the state aims to create 500,000 IT jobs in the next three and a half years.
Citing programs like the Mushroom Mission, Lokesh said Andhra Pradesh is ensuring that AI-driven growth benefits traditional sectors like agriculture and aquaculture as well, and distills into rural areas too.
Looking ahead, Andhra Pradesh has set ambitious economic targets of growing its economy from $188 billion to $2.4 trillion by 2047, with AI and data-driven development at the core of this vision.
Karnataka’s IT and BT minister Priyank Kharge defended the state’s standing as India’s premier technology hub and dismissed claims that poor infrastructure or governance drove Google’s investment to Andhra Pradesh. Kharge argued that the decision was largely influenced by the generous incentives offered by the Centre to Andhra Pradesh, not by any shortcomings in Karnataka.
He pointed out that Google received a ₹22,000 crore incentive package, including a 25% discount on land, lower water tariffs, 100% reimbursement of state GST, and power subsidies, alongside exemptions from electricity duty and transmission charges.
Lokesh took a dig at this as well. “They say Andhra food is spicy. Seems some of our investments are too. Some neighbours are already feeling the burn!” he posted on X.
Meanwhile, Karnataka announced last month that it will launch the Greater Bengaluru Integrated Township (GBIT) in Bidadi, planned as India’s first and largest AI-powered city.
Reacting on the development, deputy chief minister D K Shivakumar told mediapersons on October 16 that the city remains unmatched when it comes to infrastructure, talent, and innovation.
“Some people take the name of Bengaluru as they need it to market themselves,” Shivakumar said, responding to comments made by Lokesh.
The ‘G’ in Vizag Roots for Google!
Google’s AI data centre will enhance Visakhapatnam’s role as a digital gateway for Southeast Asia.
As part of the investment, Google will build a new international subsea gateway in Visakhapatnam, featuring multiple subsea cables connecting India’s eastern coast to its global network of over two million miles of terrestrial and undersea cables. The project will position Visakhapatnam as an AI and connectivity hub, serving India, as well as international markets.
The new gateway is expected to help meet India’s rapidly growing digital demand while providing route diversity to complement existing subsea landings in Mumbai and Chennai. It is being developed in partnership with AdaniConneX and Airtel.
The hub is expected to provide high-performance, low-latency services to businesses and organisations, enabling them to build and scale AI-powered solutions and accelerate R&D.
Union minister Ashwini Vaishnaw welcomed Google’s TPUs (Tensor Processing Units) to compete with NVIDIA’s GPUs as part of India’s shared AI computing infrastructure. He said the AI hub in Andhra Pradesh will help advance the India AI Mission and called on Google to support the large-scale reskilling of IT professionals.
Counsel for Karnataka
Despite being critical of the current dispensation, Pai remains optimistic about Karnataka’s potential. “Karnataka has to define the areas it wants to dominate, like AI, quantum computing, semiconductors, and biotechnology.”
He urged the government to set up dedicated innovation funds and data centre infrastructure. “Set up a data centre in Mangaluru, it has a coast and could become a hub,” he suggested.
Pai suggested a spike in investment towards innovation and research. “Karnataka should spend at least ₹10,000 crore a year on innovation. With a ₹4 lakh crore budget, that’s small.”
He questioned the government's priorities as it allocates ₹1 lakh crore for subsidies instead of using about 10% of that amount to create quality jobs.
Pai mentioned Hubballi-Dharwad and Belagavi as future hubs for electronics and chip packaging, as these regions have the resources to create an ecosystem. He also urged better funding for biotechnology startups struggling with long-term capital.
The contretemps between Andhra Pradesh and Karnataka reflect a new era of competitive federalism, where states race not just to attract capital, but to define India’s AI future.
Your reaction
Discussion
What's your take on this story?
No comments yet — be the first to share your view.