On April 28, Visakhapatnam (Vizag for short) witnessed what many call a transformation for this Tier II town that has remained relatively away from the limelight. The Chief Minister of Andhra Pradesh, the Union IT Minister, and the chiefs of Google Cloud, AdaniConneX and Bharti Airtel jointly inaugurated the work on a new, $15 billion data center project led by Google.
This project is the start of a new tag Vizag is soon to get one day- the ‘data center hub’ of India. Besides this, Sify, Reliance Industries and Tillman Global Holdings are just a few others who have committed to setting up data centers in the state, with total investments reaching up to $35 billion, with a target capacity of 6.5 GW AI data center hub.
What attracts Big Tech to Vizag?
Before 2025, Vizag was just another small town on the east coast, known for its scenic beaches, great food, its naval base and shipbuilding industry. The town rarely made headlines, even after Telangana was carved out of Andhra Pradesh more than a decade ago. After losing out to Amravati as the proposed capital of Andhra Pradesh, Vizag is now suddenly in the limelight, as it has clear untapped advantages that make it a natural choice vis-à-vis Bengaluru or Chennai.
Geography
With its location on the coast, the city can become the natural choice for data center infrastructure, as submarine cables can directly connect to the data centers. This can mean direct, high-speed connectivity to South East Asia, bypassing the congestion at Chennai.
Vizag also falls in a stable geological zone, with minimal risk of earthquakes. The location chosen by Google is also at an elevation, offering protection against rising sea levels.
Abundant Power, Cooling
Data centers are known to generate immense heat and require high volumes of electricity and water to run. Andhra Pradesh is a power surplus state, and its power grid remains capable enough to scale for the increased demand (though Google and others have also committed to setting up their own renewable captive power plants). Vizag has local reservoirs and seawater that fit this bill perfectly, especially for high density AI server racks.
Proximity to Tech & Industrial Hubs
The city has remained an upcoming IT hub, with numerous engineering colleges and IT parks offering a steady supply of skilled employees for operations and maintenance. Besides, the area has numerous pharma, steel, and chemical plants in the vicinity, offering captive industrial demand for its cloud and edge computing services.
Government Policy & Incentives
The Andhra Pradesh government has understood the natural advantages it has, and has been doing everything it can to woo investments in this regard. Under the Data Centre Policy 4.0, the AP state government has offered power tariff subsidies, land allotments at concessional rates and simplified ‘single window’ clearances for such investments. Besides that, it has designated these investments as ‘data center parks’ offering investors everything they need to set up shop with minimal government interventions.
Meeting the demand for computing power
Google and Reliance have been motivated to set up data centers locally in India, largely driven by increased AI use among domestic and institutional users. India remains the largest market for AI providers, with almost 65% of Indian internet users using AI in some form.
With AI adoption only expected to grow, this ‘data center gold rush’ is expected to intensify, with Vizag and its vicinity offering the ideal conditions for the same.
