On Wednesday, AI server company Super Micro Computer Inc. (NASDAQ:SMCI) said it is weighing options to build more of its systems in India as it expands its artificial intelligence business there.

Super Micro shares surged 8% on Thursday.

The Nvidia Corp (NASDAQ:NVDA) supplier company framed the decision around how best to align with government policy and customer demand for AI infrastructure.

Supermicro is evaluating whether local production would be handled in-house or through third-party partners, ANI News reported on Wednesday.

Vik Malyala, managing director and president for EMEA, said Supermicro is spending time with customers in India to map out what different buyers need as AI adoption accelerates.

Supermicro is also adding staff in-country to support deployments, according to the report.

At an AI-focused event, the company showcased high-performance platforms for both hyperscale data centers and edge use cases.

Malyala pointed to systems built around the latest Nvidia and Advanced Micro Devices, Inc. (NASDAQ:AMD) components, including B300 and liquid-cooled MI350 platforms.

He described Supermicro’s Data Center Building Block Solutions as a way to speed installation while managing energy and cooling requirements.

Nvidia and AMD are racing to build India’s AI backbone, pouring billions into data centers and local partnerships as the country positions itself as a global technology superpower.

Supermicro stock, which is trading near its 52-week lows, saw some relief after reporting second-quarter earnings.

Despite reporting a massive second-quarter earnings beat, the stock’s momentum score has collapsed from 16.26 to 6.35 week-on-week, according to the latest Benzinga Edge Stock Rankings.

This drop places the AI-server giant in the bottom 10% for relative strength, as investors appear to prioritize technical weakness over operational success.

According to Benzinga Pro data, 20.21% of Supermicro stock float is short.