Gautam Adani’s Adani Group has announced plans to invest up to $5 billion in Alphabet Inc’s (NASDAQ:GOOGL) forthcoming artificial intelligence infrastructure hub in southern India. The Chief Financial Officer, Jugeshinder Singh, indicated to Bloomberg that the firm is finalizing the investment details.
This ambitious project is part of Google’s broader strategy to enhance its footprint in India, with a total investment of $15 billion earmarked for establishing its largest AI data center outside the U.S. in Visakhapatnam. The hub is set to commence operations with an initial power capacity of 1 gigawatt, reflecting a significant investment in the nation’s digital infrastructure.
Google Cloud CEO Thomas Kurian highlighted that the initiative underscores a mutual commitment between the U.S. and India towards responsible AI development. This collaborative effort will not only bolster technological capabilities but is expected to yield substantial economic benefits for both countries.
The project will also see partnerships with Adani’s AdaniConneX and Bharti Airtel to develop the necessary supporting infrastructure. Adani characterized the announcement as a “monumental day for India,” emphasizing the AI-specific compute design of the planned campus, which aims to position India as a key player in the global AI landscape.
The significance of this investment is further highlighted by recent developments in U.S.–India trade relations. President Donald Trump has pointed to an imminent finalization of a new trade agreement with India, which he claims will enhance U.S. energy exports, strengthen defense ties, and encourage investment. This comes at a time when India is reportedly reducing its Russian oil purchases in response to U.S. sanctions, suggesting a shift in geopolitical dynamics.
In a related move, Mukesh Ambani’s Reliance Industries has decided to halt Russian crude imports for its Jamnagar export refinery, effective December 1. This decision is perceived as a step towards alleviating tensions between the U.S. and India amidst ongoing trade negotiations, especially given Reliance’s prior 10-year supply agreement with Russia.
Moreover, Reliance’s Digital Connexion recently announced an investment of $11 billion in data centers located in Visakhapatnam. Similarly, Tata Consultancy Services has secured $1 billion from TPG to propel its expansion efforts, further indicating a robust growth trajectory for India’s data center market.
According to a report by CBRE Group Inc, investments in India’s data center sector are projected to exceed $100 billion by 2027, signaling a burgeoning market driven by increasing demand for cloud services and data storage solutions.
As companies like Google and Reliance commit substantial resources to technological advancements, the landscape for digital infrastructure in India is set to evolve rapidly. The establishment of this AI infrastructure hub not only promises to create jobs and stimulate the economy but also solidifies India’s role as a crucial player in the global technology supply chain.
In the stock market, GOOGL shares were trading down by 0.65% to $317.91 at the last check on Friday, reflecting a broader market sentiment amidst the ongoing developments.
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