In the past few months, the Big Tech firms, including Microsoft, Google and Amazon, have announced multi-billion-dollar investments to build data centres in India. But in all three cases, Karnataka is notably missing from their expansion plans.
During Microsoft CEO Satya Nadella’s recent India visit, the company announced a $17.5 billion investment, its largest in the region. The company will expand cloud and AI infrastructure, add new data centre regions, and scale capacity across existing sites in Pune, Chennai and Mumbai. A new India South Central cloud region in Hyderabad is scheduled to go live by mid-2026.
Earlier, Karnataka felt the loss when Google announced a $15 billion AI data-centre project in Visakhapatnam.
Notably, Andhra Pradesh IT and industries minister Nara Lokesh met Google CEO Sundar Pichai in San Francisco on December 10. In a post on X, he said, “We reviewed progress of their landmark $15 billion investment in the Visakhapatnam AI Data Centre, which is set to be one of the largest FDI projects.”
Pichai called the Vizag AI hub a landmark development during a call with Prime Minister Narendra Modi. He said the project will have large-scale computing power, a new subsea cable gateway, and strong energy infrastructure to support AI growth in India.
At the Bharat AI Shakti event, he stated that this would be Google’s largest AI investment outside the US, with $15 billion to be invested over five years.
On the policy and incentives front, Lokesh said that the state has created a framework that enables companies like Google to scale quickly while ensuring long-term economic benefits for the region.
Similarly, Microsoft’s investment is the biggest in Asia. During his recent tour to Bengaluru, Nadella spoke about multiple cloud regions in India, including Central and West India, but the company does not operate a data centre in Bengaluru or anywhere else in Karnataka.
What is Karnataka upto?
The IT capital did not secure any comparable hyperscale projects in 2025. The Google and AWS commitments in neighbouring states are significantly larger than any recent announcements made in Karnataka.
Karnataka’s IT Secretary N Manjula and IT Minister Priyank Kharge were unavailable for comments.
Meanwhile, Datasamudra, the data centre arm of Teleindia Datacenter, plans to invest ₹300–500 crore over the next few years to expand beyond Bengaluru. The company will build a 35–40 MW AI-focused data centre in Mangaluru, along with 5 MW edge facilities in Mysuru and Hubballi–Dharwad.
NTT announced a ₹2,400-crore investment for a new multi-data centre campus in Devanahalli near Bengaluru airport on December 3, 2025. The 8.5-acre site will house three facilities with over 60 MW capacity, including Bengaluru 4A, already operational at 22.4 MW, supported by a 220 kV substation and 48-hour backup.
The state’s other notable investments include Burkhan World Investment (BWI), which announced a ₹1,500 crore plan to set up a GPU and AI server manufacturing facility near Devanahalli, on the outskirts of Bengaluru.
Karnataka has also signed an MoU with Taiwan-based Allegiance International to establish an India–Taiwan Industrial Technology Innovation Park (ITIP). Under the agreement, Allegiance will invest ₹1,000 crore over five years to develop the park, aimed at strengthening electronics and semiconductor manufacturing.
The project is expected to create around 800 direct jobs as Taiwanese firms set up advanced manufacturing, chip design and R&D units.
Taiwanese electronics manufacturer Hon Hai Precision Industry (Foxconn) hired nearly 30,000 workers at its new iPhone assembly facility near Bengaluru over the last nine months, marking one of the fastest factory ramp-ups ever seen in India.
Besides that, the Karnataka government recently announced an investment of ₹967 crore in incentives under the new IT Policy for 2025-2030 to attract large-scale investments in AI, quantum computing, cybersecurity, and other emerging technologies.
However, during Invest Karnataka 2025, the government secured Rs 10.27 lakh crore (approximately $120 billion) in total investment commitments, including Rs 4.03 lakh crore in announced/recognised investments and Rs 6.23 lakh crore via signed MoUs.
Andhra and Telangana Firepower
Lokesh has been at loggerheads with Karnataka’s IT minister Priyank Kharge over investment claims. The two have exchanged barbs on X over Bengaluru’s infrastructure problems.
Lokesh also made headlines this month for a global roadshow. In San Francisco, he met OpenAI, AMD, Intel, NVIDIA, Canva, Adobe, Autodesk, Salesforce and others to pitch AP as a future tech hub. He proposed an AI University and free ChatGPT access for students, and invited OpenAI to base its data centre operations in Visakhapatnam.
The state has notched another major win in IT services. In December 2025, Cognizant laid the foundation for a 22-acre mega campus at Kapuluppada IT Hills in Visakhapatnam. With a total investment of around ₹1,583 crore, the three-phase project is expected to accommodate 20,000 employees, including about 8,000 direct jobs eventually.
Meanwhile, in Telangana, AWS has signed a framework to invest $7 billion in Hyderabad’s cloud infrastructure by 2030, building on its existing region launched in 2022.
The investment builds on its Hyderabad region launch in 2022 and is part of Amazon’s broader $12.7 billion commitment to expand cloud and AI infrastructure in India, announced in May 2023.
Recently, Google and the Telangana government launched the Google for Startups Hub at T-Hub in Hyderabad, featuring a dedicated space to support the state’s growing startup ecosystem.
The state recently concluded the Telangana Rising Global Summit 2025 at Bharat Future City, where it announced investment commitments totalling ₹5.75 lakh crore.
Several of the significant announcements were concentrated in capital-intensive data centre and AI infrastructure projects. Leading these was Infrakey Datacenter Parks, which signed an agreement to set up a 1 GW AI data centre with an investment of ₹70,000 crore, one of the largest single technology commitments announced in the state so far.
Duddilla Sridhar Babu, IT minister of Telangana, told AIM that both large and small tech companies are investing in the state, supported by government policies. “Hyderabad offers a strong value proposition in terms of talent depth, cost efficiency, cross-vertical domains for engineering innovation, and a strong government focus on capacity building and co-innovation,” he said.
Still hope for Karnataka
Mohan Das Pai, former CFO and board member at Infosys remains optimistic about Karnataka’s potential. “Karnataka has to define the areas it wants to dominate, like AI, quantum computing, semiconductors, and biotechnology,” he had earlier told AIM.
He urged the government to set up dedicated innovation funds and data centre infrastructure. “Set up a data centre in Mangaluru, it has a coast and could become a hub,” he suggested.
Pai suggested a spike in investment towards innovation and research. “Karnataka should spend at least ₹10,000 crore a year on innovation. With a ₹4 lakh crore budget, that’s small.”
The contrast playing out across southern India highlights how decisively infrastructure readiness, policy execution, and speed now shape big-tech investment outcomes.
As AI and data centres become increasingly capital-intensive and power-hungry, states that align land, energy, talent, and regulatory clarity into a single operating framework are pulling ahead.
For Karnataka, the challenge is no longer about brand or legacy—it is about whether it can recalibrate fast enough to compete in an AI-first investment cycle that is already moving elsewhere.
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