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On Saturday, Andhra Pradesh Chief Minister Chandrababu Naidu announced in Visakhapatnam that Google plans to construct a data center in the state, with a total investment of more than $15 billion over the next five years.
When asked whether Google could make further investments after five years, he said that it was a possibility, depending on the company’s priorities. He further remarked, “It is a win-win situation to start with $15 billion within five years.”
Naidu says they are positioned to become a global hub for data centers
So far, Naidu stated, Andhra Pradesh has secured 5.5 GW of data center projects from companies including Reliance and intends to scale up its green energy output. He said the projects are a “game changer”, drawing everyone’s attention to the state. He added that they are on track to become a worldwide hotspot for data centers.
Economists argue that Google’s investment can significantly enhance Andhra Pradesh’s economy through job creation, supply chain expansion, and improved digital infrastructure. Big data centers usually create thousands of indirect jobs in construction, fiber installation, cooling systems, and engineering services.
Naidu has claimed that such investments will help make the state a magnet for high-tech companies, which may encourage tax revenues and foster a growing local startup ecosystem.
Google last month announced that its Visakhapatnam Data Center will be powered by new energy sources and complemented with fiber-optic infrastructure. Gautam Adani had also stated that AdaniConneX would collaborate with Google on the project with Bharti Airtel, the country’s second-largest mobile carrier. Currently, the Visakhapatnam project is Google’s largest investment in the country and will support the regional government’s initiative to strengthen the local AI industry.
Meanwhile, Prime Minister Narendra Modi continues to view technology as a key instrument of national growth and supports its development; however, India is confronted by serious problems with its water and electricity infrastructure.
Currently, the CBRE Group estimates that India will see over $100 billion invested in its data center market by 2027, while Goldman Sachs Research projects around 122 GW of data center capacity globally by 2030. Analysts estimate that as data centers draw more power, roughly $720 billion will be needed to strengthen the electric grid by 2030.
India’s advocacy groups have raised concerns over more strained water resources
Although India generates a fifth of the world’s data, it accounts for only 3% of global data center capacity. Still, the country is projected to lead the world in data consumption by 2028, due to lower costs and the massive growth of internet and mobile use.
Kotak Research found that India has some of the world’s lowest data center development costs, behind only China, and electricity rates are far lower than in the US, UK, or Japan, which companies are taking advantage of.
However, the AI revolution globally has forced policymakers to make tough trade-offs. Chile, Mexico, Georgia, and Scotland have all seen concerns over data centers that consume vast amounts of water and energy, sometimes to the detriment of local residents. These challenges are only heightened in India, a country facing severe energy and water shortages. According to the World Bank, India has 18% of the global population but only 4% of its water resources.
By 2030, India’s data centers are projected to consume 358 billion liters of water, up from 150 billion liters in 2025, intensifying stress on water resources. The Human Rights Forum and other organizations have already raised alarms about the Andhra Pradesh government diverting public resources to Google’s planned data center, noting that Visakhapatnam’s water shortage could be exacerbated.
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