India’s $175Bn AI data city plan draws investors, to boost outsourcing
NEW DELHI, INDIA — India’s push to build a sprawling artificial intelligence (AI) “data city” in Andhra Pradesh is set to transform global tech investments. Backed by US$175 billion in statewide project agreements, the initiative positions the country as a hub for next-generation digital infrastructure and a new era of offshore services, according to a special analysis by Omanet.
According to Nara Lokesh, the IT minister of Andhra Pradesh, the city of Visakhapatnam will serve as the strategic and operational center for India’s AI development, as it offers both capabilities.
“The AI revolution is here, no second thoughts about it,” Lokesh said, emphasizing the city’s growing role in the country’s technological future.
Andhra Pradesh has already secured investment agreements for 760 projects. This sweeping US$175 billion portfolio includes a US$15 billion AI hub established by Google, alongside a US$11 billion AI data center backed by India’s Reliance Industries, Canada’s Brookfield, and U.S.-based Digital Realty.
Visakhapatnam AI infrastructure and tech investments
Lokesh described the project as “about more than just data centers,” highlighting a 100-kilometer (60-mile) integrated ecosystem comparable in size to Taiwan.
Visakhapatnam, commonly known as Vizag, is also being positioned as a key landing point for submarine internet cables connecting India with Singapore, strengthening the city’s global connectivity.
The state has aggressively advanced its AI capabilities, having successfully attracted nearly 25% of India’s total foreign direct investment in 2025.
Microsoft announced a US$17.5 billion investment to bolster India’s AI capabilities, marking its largest-ever investment in Asia.
“Every industrial revolution has always created more jobs than it has displaced. But those jobs have been created only in countries that have embraced the industrial revolution,” Lokesh noted.
How India’s data city expands global IT outsourcing
India’s AI data city is more than a tech hub—it could be a catalyst for expanding the country’s outsourcing ecosystem.
By developing high-capacity data centers and AI operations outside traditional Tier-1 cities, the project promises future talent pools, new outsourcing verticals, and opportunities for offshore service delivery to global clients.
Smart investors and firms may leverage the city’s infrastructure to tap into India’s booming AI market and explore collaborations across AI-enabled processes, business process outsourcing (BPO), and shared services.
“We are on a journey. We will execute these projects at a pace the country has never seen,” Lokesh concluded.
Andhra Pradesh’s AI ambitions for its global outsourcing sector create a strategic change that will develop India’s digital services for the next decade through its combination of technological capabilities and skilled workers, and its existing infrastructure.
