Alphabet (GOOGL.US) plans to invest more than $10 billion in southern India to construct a 1-gigawatt data center. This initiative represents a significant strategic deployment by Alphabet in the Indian market, which serves as one of the key markets in its global expansion plan.

Nara Lokesh, Technology Minister of Andhra Pradesh state, revealed in an interview that this Alphabet data center is scheduled for completion within two years in the port city of Visakhapatnam, forming part of the state's ambitious goal to establish 6 gigawatts of data center capacity by 2029. Lokesh, son of Andhra Pradesh Chief Minister Nara Chandrababu Naidu, emphasized: "This is not just about job creation, but more importantly, it will generate broader ripple effects and drive substantial economic activity."

Driven by the demand for artificial intelligence (AI) systems, a global data center construction boom has emerged, with India becoming one of the biggest beneficiaries. Amazon.com Inc. plans to invest $12.7 billion in cloud infrastructure in this South Asian nation by 2030, while ChatGPT developer OpenAI is also seeking to build a 1-gigawatt data center in India.

According to CBRE Group Inc. data, investment in India's data center market is expected to exceed $100 billion by 2027. Indian Prime Minister Narendra Modi has consistently positioned the technology sector, including data centers, as a crucial lever for boosting the national economy and helping millions escape poverty.

However, India faces numerous challenges in realizing this vision: water scarcity and unstable power supply remain significant bottlenecks constraining data center development.

Lokesh's Telugu Desam Party, led by his father, serves as an important partner in Modi's governance agenda. The Andhra Pradesh government provides land and electricity subsidies for new industrial projects. Back in the late 1990s, Naidu gained recognition for his visionary governance by transforming the state capital Hyderabad into a technology hub, where companies like Microsoft (MSFT.US) and Oracle (ORCL.US) now maintain large facilities.

Currently, the Telugu Desam Party is leveraging its influence to secure more favorable federal policies for companies investing in Andhra Pradesh. "We are willing to engage in dialogue and will even push for federal-level policy intervention when necessary," Lokesh stated, describing this strategy as a "dual-engine high-speed train."