Nara Lokesh for $100 billion investment in data centres

The Andhra Pradesh IT Minister pushes for development of data cities across India to power AI revolution

New Delhi: Andhra Pradesh IT Minister Nara Lokesh has proposed that India should target $100 billion of data centre investments each year and look to develop AI/data cities across the country.

Lokesh wrapped up a two-day visit to the national capital this week where he met senior central government ministers and leading members of industry such as India leadership of Microsoft and Google, sources said.

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Among his meets were one-on-ones with Union Ministers Ashwini Vaishnaw, Rajnath Singh and Dharmendra Pradhan.

Sources said Lokesh made a pitch to Vaishnaw for development of “data cities” across the country. He mentioned that data cities should be set up to power upcoming AI revolution. The minister wanted the central government to provide an incentive package for development of “data cities” across the country.

Andhra Pradesh is developing India’s first “data city” near Vizag, land is being acquired near Madhurawada. Google has announced that they would be setting up an AI data centre. It would be an anchor client.

Data cities are energy guzzlers, they will be powered by renewable energy. Lokesh mentioned that annually over USD 300 billion of investment is taking place in data centres across the world. India should aim for one third, or USD 100 billion annually in data centres.

The data centre (DC) industry has experienced explosive growth over the past decade, driven by ever-increasing demand for cloud services and the use of web-enabled devices globally.

The explosion in interest in generative artificial intelligence has led to a race to develop the technology, which will require many high-density data centres as well as much more electricity to power them.

The global mega data centre market size reached USD 26.8 billion in 2024 and it forecast to reach USD 40.6 billion by 2033. In the US market alone, demand – measured by power consumption to reflect the number of servers a data centre can house – is expected to reach 35 gigawatts (GW) by 2030, up from 17 GW in 2022, according to McKinsey analysis. The United States accounts for roughly 40 per cent of the global market.

Lokesh pitched that Andhra Pradesh would be a test case for AI in governance across the country. The state is working on superior data sets and collection activities through recent initiatives like WhatsApp governance and skill census.

Lokesh also heads a department called “real time governance”. AI use cases will be incubated here.

He pitched to Vaishnaw that Andhra Pradesh would be happy to take the lead on AI to transform governance, sources said, adding these can be then implemented in other states across the country.