**Andhra Pradesh IT Minister Nara Lokesh Advocates for $100 Billion Annual Investment in Data Centers**
New Delhi, Feb 7 (PTI) – Nara Lokesh, the IT Minister of Andhra Pradesh and general secretary of the TDP, has proposed that India should aim for an annual investment of USD 100 billion in data centers and develop AI/data cities nationwide. During his recent two-day visit to the national capital, Lokesh engaged with senior central government officials and industry leaders, including representatives from Microsoft and Google.
His discussions included one-on-one meetings with Minister for Information Technology Ashwini Vaishnaw, Defence Minister Rajnath Singh, and HRD Minister Dharmendra Pradhan. Lokesh emphasized the need for “data cities” to support the forthcoming AI revolution, suggesting that these cities should be established as clusters of data centers capable of powering AI technologies. He urged the central government to create an incentive package to facilitate the development of these data cities.
Andhra Pradesh is already in the process of establishing India’s first “data city” near Vizag, with land acquisition underway in Madhurawada. Google has also announced plans to set up an AI data center in the region, which will serve as an anchor client. These data cities, known for their high energy consumption, will be powered by renewable energy sources.
Lokesh highlighted that global investments in data centers exceed USD 300 billion annually, and India should target one-third of that amount, or USD 100 billion, each year. The data center industry has seen remarkable growth over the past decade, fueled by the rising demand for cloud services and web-enabled devices. The surge in interest in generative artificial intelligence has intensified the need for high-density data centers, which require substantial electricity to operate.
The global mega data center market was valued at USD 26.8 billion in 2024 and is projected to reach USD 40.6 billion by 2033. In the U.S. market, demand for data centers, measured by power consumption, is expected to rise to 35 gigawatts (GW) by 2030, up from 17 GW in 2022, according to McKinsey analysis. The United States currently holds approximately 40 percent of the global market share.
Lokesh also proposed that Andhra Pradesh could serve as a model for AI in governance across India. The state is enhancing its data collection efforts through initiatives like WhatsApp governance and a skill census. As the head of the “real-time governance” department, Lokesh aims to incubate AI use cases in the state, suggesting that successful implementations could be replicated in other states across the country.
