Amazon's $35 bn bet lifts India's AI tide

It comes on top of the $3 billion investment that was earmarked for this year and the next for cloud and Al infrastructure including for setting up data centres.

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In October, Google had announced its plan to set up a 1 gigawatt (GW) Al data centre in the port city of Visakhapatnam, Andhra Pradesh, investing $15 billion over the next five years.

What makes India such an attractive destination for investment, even as AI bubble burst has been a dominating theme globally?

Prime Minister Modi captured the essence of tech majors investing in India, in a post on X on Tuesday. “When It comes to AI, the world is optimistic about India. The youth of India will harness this opportunity to innovate and leverage the power of Al for a better planet,” Modi wrote.

Speaking to Business Standard on Wednesday, Russ Grandinetti, Senior Vice President of International Stores at Amazon, said: “India is the most populous country in the world. It is not too far away from a time when it will be the third-largest economy. These things alone would be enough to justify the focus and interest in building our business here because the local market and opportunity are very large.” He added that, “at a second level, there are so many things we often build here first, and then bring to other parts of the world. So, India is often a crucible, an idea generator...”

However, some experts and analysts say the three hyperscalers collectively invest billions of dollars every quarter in AI worldwide. Measured against that, the numbers in India may seem modest. However, it also signals the intent of these companies to put India into a small exclusive league of markets where they are prepared to make multi decade, multi-billion dollar bets on AI specific capacity.

“The timing and sequencing matter as well. That is competitive choreography aimed at securing enterprise trust, regulatory goodwill, and developer loyalty before rivals lock them in,” said Sanchit Gogia, chief analyst, founder and CEO of technology advisory firm Greyhound Research.