Investment Surge by Global Technology Giants in India
India has witnessed significant investments from global technology giants, focusing on AI-driven digitisation, exports, and job creation.
- Amazon: Committed over $35 billion through 2030.
- Microsoft: Announced $17.5 billion for Cloud, AI infrastructure, and skilling, marking its largest investment in Asia.
- Google: Investing $15 billion to establish its largest AI and data-centre hub outside the US in Visakhapatnam.
- Meta: Partnered with Reliance for enterprise AI platforms and exploring a 500-megawatt data centre in Andhra Pradesh.
Factors driving these investments include a vast digital consumer base, affordable data, robust digital infrastructure, and regulatory measures like the Digital Personal Data Protection Act bolstering policy stability.
Data-Centre Industry Developments
India’s data-centre industry is expanding with new facilities in various cities, demanding significant resources such as electricity and water.
- Data centres require advanced cooling systems, fibre-optic connectivity, and subsea cable links.
- Environmental concerns necessitate careful design choices in power sourcing, cooling technologies, and water reuse.
Google's Vizag project, in collaboration with partners like Adani and Bharti Airtel, showcases how such investments can impact local ecosystems, creating nearly 180,000 jobs.
Role and Evolution of Global Capability Centres (GCCs)
GCCs are evolving into innovation hubs, with 92% of leaders recognizing their role in value creation, particularly in deploying generative AI.
Despite US-India tensions, American firms remain confident in India's strategic importance and long-term potential.
Challenges and Opportunities
- India’s output of over 1.5 million engineering graduates annually and its significant share in global semiconductor design workforce enhances its appeal.
- There is a need for strategically locating data centres in regions with abundant renewable energy.
- Scaling up alternatives to water-intensive cooling is essential, especially in water-stressed areas.
Lessons can be drawn from Nordic countries, leveraging near 100% renewable energy for data centres and repurposing waste heat.
Balancing capacity by distributing demand between large and smaller data centres is crucial, alongside sustained investment in skilling and R&D to progress up the AI value chain.
