It Built Bengaluru's Electronic City. Now, it Wants to Make an AI Comeback

Nearly five decades after it seeded Bengaluru’s rise as India’s technology capital, KEONICS (Karnataka State Electronics Development Corporation Limited) is attempting a reset.

Once the architect behind Electronic City, the nucleus of India’s IT boom, the state-run agency is now grappling with a more complex challenge: staying relevant in an AI-first world after years of institutional drift.

“I think the biggest success is… Electronic City,” says KEONICS Chairman and Hoskote MLA Sharath Kumar Bache Gowda in an interview with AIM. “It served as a nucleation point for Bengaluru’s IT boom… Infosys grew out of there, Wipro grew out of there.”

That legacy is formidable. In 1978, KEONICS established Electronic City on 332 acres of land in Konappana Agrahara and Doddathogur village. The idea was to develop the region as an electronics hun. The cluster went on to anchor one of the densest concentrations of engineering talent globally. But Bache Gowda is candid about what followed.

“Our failure is probably in keeping up with the times… getting comfortable in the area.”

That admission sits at the core of KEONICS’ current pivot.

On AI-Era Relevance

The organisation’s revival strategy hinges on repositioning itself across three fronts: infrastructure, skilling, and emerging technologies.

First, infrastructure. KEONICS is doubling down on its original playbook, building anchor tech parks, but this time beyond Bengaluru. Through its “Beyond Bengaluru” push, it aims to create grade-A facilities in cities such as Mysuru, Mangaluru, Dharwad, and Kalaburagi, hoping to replicate the catalytic effect Electronic City once had.

Last year, it floated a ₹135 crore tender for a tech park project in Mangaluru, executed under a public-private partnership model.

“The idea is to create a nucleation point… where you bring in growth around that area,” Bache Gowda says.

This decentralisation push is necessary. Bengaluru alone accounts for roughly ₹5.5 lakh crore in IT exports, while the next rung of cities contributes a fraction of that. Bridging this gap is central to Karnataka’s next phase of growth.

Second, skilling. KEONICS’ training programmes—long criticised as outdated—are undergoing an overhaul. The curriculum, unchanged since 2016, is now being redesigned to include AI and contemporary digital skills.

“We need to make sure that we are training for the current requirement,” he says, acknowledging that legacy courses centred on MS Office and basic programming are no longer sufficient.

Yet, even in an era of abundant online learning, Bache Gowda argues for physical training centres. “Not everybody has a piece of technology… not everybody has a peaceful environment where they can sit and study,” he notes, positioning KEONICS as a hybrid access provider—part digital, part physical.

Third, technology direction, i.e. focus on artificial intelligence.

“I think it’s definitely a disruption and an opportunity,” the KEONICS Chairman says. “AI will take out some jobs, but it will create many more new jobs.”

His framing is pragmatic rather than alarmist. Productivity gains—such as reduced coding time—are already visible, but they are being offset by rising complexity in debugging and quality control. In that sense, AI is reshaping work, not eliminating it.

Beyond immediate deployment, KEONICS’ leadership is also thinking about where India stands in the global AI stack.

“AI is a very resource-intensive beast,” Bache Gowda says, outlining dependencies from energy and chips to cloud infrastructure and data. “Right now, we are possibly at the apps… there’s a lot of backward integration… which we need to work out.”

The implication is clear: without domestic capabilities across these layers, India’s AI ambitions risk being superficial.

KEONICS is looking to serve a quieter, but foundational, role, enabling infrastructure and ecosystems rather than competing with global model builders.

Bengaluru: Saturation or Scale?

Even as it looks outward, KEONICS is not writing off its home base.

Contrary to recurring narratives, Bache Gowda insists Bengaluru is far from saturated. “We’re very far away… infrastructure plays catch-up everywhere,” the MLA says, pointing to sustained growth rates of 12–14% and significant public investment in urban infrastructure.

The real challenge, then, is not replacing Bengaluru but replicating its success—selectively and strategically—across the state. His ask from the central government is simple: more investment for Karnataka.

“Bring something… ₹50,000 crore… ₹1 lakh crore… Bangalore is a beacon of development,” he remarks.

KEONICS’ story mirrors that of many public institutions: early vision, subsequent inertia, and now an attempt at reinvention. What distinguishes this moment is the context. 

The first time, KEONICS helped build India’s IT services backbone. This time, it is stepping into a far more contested and capital-intensive arena—AI, digital infrastructure, and distributed innovation.

As Bache Gowda frames it, the task is less about disruption and more about direction—ensuring that the next wave of technology growth is not just concentrated, but shared.