Why big tech is moving its AI money to India — and what it means for global tech power
Is India building the data infrastructure that will define the next era of global tech power?
• Big Tech firms have pledged over $20B to build AI infrastructure in India, led by Google, Microsoft, Meta, and OpenAI.
• India’s policy incentives and infrastructure push have turned it from a software hub into a global AI construction base.
• China’s tighter tech controls and India’s open-market model are reshaping where global AI power is built.
In the coastal city of Visakhapatnam, a new skyline is taking shape. Google is building what it calls its largest AI campus outside the United States, a $15 billion project that includes a subsea-cable landing, a data-centre campus, and renewable-energy infrastructure.
The announcement came as Microsoft confirmed a $3 billion expansion in its cloud and AI operations and OpenAI began discussions to set up a one-gigawatt data centre with local partners. Then, in October 2025, Meta joined in with a $100 million partnership with Indian tech giant, Reliance Industries, to develop AI tools and computing infrastructure.
Together, these projects have pushed India’s total AI and cloud commitments beyond $20 billion this year, according to the Ministry of Electronics and IT. It also marks a turning point for a country once known mainly as a software-outsourcing hub.
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What explains India’s sudden rise in the global AI map?
The answer lies in timing, scale, and direction. As global AI infrastructure spending surged to $189 billion in 2024, technology giants began searching for regions where they could expand without the policy risks emerging in China. India stood out because its decade-long digital transformation had already built the foundations for scale, and its policy focus had shifted from access to capability.
That shift is visible in how the government now treats AI as infrastructure.
Through the IndiaAI Mission, a $1.2 billion national programme, India is developing domestic computing power and training engineers to support large-scale AI workloads.
Plus, the upcoming National Data Centre Policy 2025 builds on that momentum with 20-year tax incentives for hyperscale operators and cloud developers, including Google, Microsoft, and AdaniConneX, that meet energy-efficiency and capacity targets. Granting the sector formal infrastructure status has also opened access to long-term financing and land acquisition, speeding up construction.
Alongside Production-Linked Incentive (PLI) schemes for semiconductors and electronics, these measures have turned India from a market for digital services into a builder of digital systems.
And the results are visible on the ground. India’s data-centre capacity has more than doubled since 2022, from 870 megawatts to nearly 1,900 megawatts, according to JLL. At the same time, new subsea-cable systems from Google and Meta will now link Visakhapatnam, Chennai, and Hyderabad directly to global compute corridors, turning India’s east coast into a gateway for AI infrastructure.
This combination of policy intent, industrial capacity, and long-term stability explains why Google, Microsoft, Meta, and OpenAI are investing billions in India. The country offers something rare in the global AI race—a place where infrastructure, incentives, and market all scale together.
Why are global technology firms scaling back in China?
Only a few years ago, China filled this role. Microsoft ran its largest research centre in Beijing, Apple built its supply chain in Shenzhen, and Amazon hosted local cloud regions. A decade of tightening oversight has since reshaped that space.
The government’s Eastern Data, Western Computing initiative has channelled about $6 billion into domestic data-centre projects, while national AI spending exceeds $125 billion. Yet private investment is shrinking. The Stanford AI Index reports that China’s private-sector AI funding fell to $9.3 billion in 2024, its lowest level in five years.
For global companies, China’s state-driven model leaves little room for participation. India, by contrast, offers transparency, market access, and an open partnership model, the same combination that made China’s tech sector irresistible two decades ago.
Emmanuel Oyedeji
How does India compare with other emerging markets?
India’s $20 billion in AI and cloud commitments put it far ahead of its peers. Microsoft’s $2.7 billion investment pledge in Brazil and $1.7 billion in Indonesia reflect growing interest across the Global South, but none combine India’s market scale with its policy and infrastructure depth.
Even developed economies are not far ahead. The United Kingdom’s AI investment, around $28 billion, remains only slightly higher. Meanwhile, India’s domestic programmes, from the IndiaAI Mission to chip-manufacturing incentives, ensure that foreign capital and national capability expand together.
For other emerging markets like Africa, the lesson is clear. Policy consistency and infrastructure readiness matter as much as innovation. Without them, even a fast-growing digital economy can miss the wave of AI investment now reshaping the global tech order.
What does this shift mean for the geography of global technology?
The world’s AI infrastructure is moving from concept to construction.
Across Andhra Pradesh, Tamil Nadu, and Telangana, new data-centre corridors and subsea-cable routes are transforming India’s east coast into a connected hub for global compute power.
For Big Tech, investing in India means securing long-term capacity in an open, rapidly digitising economy. For India, it marks a shift from software outsourcing to owning the infrastructure layer of global technology.
China defined the manufacturing era of the digital economy. India is now wiring the infrastructure that will define the intelligence era.
Ogbonda Chivumnovu
