India’s AI Aspirations Draw Multibillion Big Tech Investments

Amazon and Microsoft are reportedly investing billions in India’s artificial intelligence (AI) efforts.

As the Financial Times (FT) reported Monday (June 17), India is offering incentives for tech companies to build there, hoping the country’s burgeoning technology market and massive pool of skilled workers will make it a major AI consumer and exporter.

The report notes that Microsoft has pledged around $3.7 billion to the southern Indian state of Telangana, where it will build data centers aimed at adding 660 megawatts of IT capacity — equivalent to the yearly electricity needs of about 500,000 households in Europe.

For its part, Amazon plans to invest around $12.7 billion in cloud infrastructure in India by the end of the decade, the report adds.

“India today is one of the most exciting markets in the world for tech,” Puneet Chandok, Microsoft’s president for India and South Asia, told the FT.

“The intent is to constantly build capacity in this part of the world to serve customers who are both innovating for India and for the world.”

The FT notes that tech companies’ efforts to build their own data centers in India will put the country in the number one spot in terms of self-built capacity for data centers.

This follows reports from last month that Microsoft and Amazon had set aside $40 billion for AI infrastructure projects just this year.

Also in May, chipmaker Nvidia reported that demand for its products has been fueled by companies and countries that are moving from traditional data centers to “AI factories.”

“In Q1, we worked with over 100 customers building AI factories ranging in size from hundreds to tens of thousands of GPUs, with some reaching 100,000 GPUs,” Nvidia Executive Vice President and Chief Financial Officer Colette Kress said on an earnings call.

Meanwhile, PYMNTS last week examined AI’s popularity among CFOs, with research showing that 63% say that the technology has reduced their need for lower-skill workers, while it may also require new skill sets. Another 58% of finance chiefs said they need more analytically skilled employees.

“Despite the number of organizations already using AI, we are still on the front end of the AI revolution,” PYMNTS wrote. “The numbers findings from our report represent an early dispatch from that revolution. As applications for AI mature, the needs of all companies, large and small, will continue to evolve. However, one thing is clear: we are beginning to see the potential of AI.”