Google to Spend Fifteen Billion Dollars to Build New AI Data Center in India

What Happened?

This week, Google announced it would invest fifteen billion U.S. dollars to build a new AI data center in southern India’s Andhra Pradesh state. The money would be spent incrementally over the next five years, with an estimated completion date of 2030.

‘It's the largest AI hub that we are going to be investing in anywhere in the world, outside of the United States,’ Thomas Kurian, the CEO of Google Cloud, said at an event in the capital Delhi this week. 

Alphabet CEO Sundar Pichai said the facility ‘will bring our industry-leading technology to enterprises and users in India, accelerating AI innovation and driving growth across the country.’

Why it Matters

India has long been a favorite destination for investment by technology companies. Low data costs, along with an abundance of highly educated and skilled workers, have made India a global technology hub. In addition, the local government in Andhra Pradesh offered Google subsidized land and electricity. Because data centers tend to use substantial amounts of power, the low costs of electricity for this project likely played a major role in Google’s decision to choose that location.

Data centers provide the physical infrastructure needed to operate AI programs. Recently, Walmart announced a partnership with OpenAI that will allow shoppers to make purchases from the retailer directly from ChatGPT. Google has offered new options for users to get medical advice directly from its AI programs. These examples illustrate how AI is not only growing but rapidly becoming integrated into the everyday lives of millions and potentially billions of people around the world.

While the center in India is being built to provide improved AI access for that country, it is likely the ramifications will spread far beyond India’s borders. Bangalore, India, is the largest technology hub in the country, and one start-up there seeks to replace all human customer service agents with AI programs by the end of the decade. While that may be an overly ambitious goal, their efforts illustrate how fast-moving and far-reaching AI has the potential to be for the global economy. 

Tech companies have deep pockets, and locations that can offer low costs and skilled workers stand to attract billions in AI-related investments. The global race is on for countries looking to attract new investments by tech companies by competing to offer better deals and incentives to companies like Google.

How it Affects You

The rapid integration of AI will likely become more disruptive to the global economy in the next five years as large-scale infrastructure projects like Google’s are completed, enabling even more powerful AI applications. Like all disruptive technologies, there will be winners and losers from the AI revolution.