Andhra Pradesh has closed a major data centre deal with global tech giant Google and leading Indian Information and Communications Technology (ICT) service provider Sify. These agreements, totalling $7.9 billion in investment and contributing 1.55 gigawatts (GW) to the state’s data processing capacity, a source in the Andhra Pradesh government told NDTV.

Google is set to invest a staggering $6 billion in a 1 GW data centre in Andhra Pradesh. Sources indicate that this massive facility will be located in the port city of Visakhapatnam. 

Notably, $2 billion of this investment is earmarked for developing renewable energy capacity to power the centre, aligning with the growing global demand for sustainable digital infrastructure. This project alone is expected to be the largest in Asia, both in terms of capacity and investment.

Complementing this, the Andhra Pradesh cabinet, in its meeting last week, officially approved a substantial data centre project with Sify. This initiative involves an investment of approximately $1.9 billion for a 550 MW data centre facility.

Andhra Pradesh has worked on attracting IT and technology-related businesses, particularly through its recently launched IT & Global Capability Centres (GCC) Policy (4.0) for 2024-2029.

This policy offers a range of incentives, including capital subsidies, rental assistance, power incentives, and tailor-made packages for mega-projects, aiming to bridge infrastructure gaps and foster a hybrid work ecosystem.

Andhra Pradesh’s Minister for IT, Electronics, and Education, Nara Lokesh, has been a vocal proponent of the state’s data centre ambitions. 

He recently said that Andhra Pradesh has already finalised investments for data centres totalling 1.6 GW and aims to build an ambitious 6 GW of data centre capacity over the next five years from its current near-zero base.

Mr Lokesh also said that there were plans to establish three new cable landing stations in Visakhapatnam, further positioning the city as a crucial digital gateway for India and Southeast Asia, potentially rivalling existing hubs like Mumbai.