Why Visakhapatnam is a Data Center hub: Guide to Datacenter Site Evaluation

Why Visakhapatnam Is Becoming a Datacenter Hub

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India has been keen to invest in major technological advancement and hyperscale data centers is one among them due to the demand of cloud infrastructure. Visakhapatnam (also known as Vizag) in the Andhra Pradesh state of India is rapidly emerging as a data center hub due to the latest investments from major tech giants.

Data Center Investments in Andhra Pradesh, India

One major datacenter investment India has seen in 2025 is Google’s investment in Andhra Pradesh. Google is building an AI-first data center campus with an investment of $15 billion over five years. This would be a 1-GW hyperscale datacenter to meet its demand for AI and cloud services.

Official announcement from Indian government: Link to Press Release

Digital Connection, a joint venture by Reliance Industries, Brookfield and Digital Realty has invested in the development of a 1-GW datacenter which will be completed by 2030. It is a $11 billion worth investment to expand the cloud services meeting the latest technology and AI driven business growth.

Tillman Global Holdings has also proposed a hyperscale datacenter project worth 15,000 Crores in the state of Andhra Pradesh. Hyperscale datacenters are facilities supporting major cloud providers ensuring efficiency and rapid scaling. This will be on a 40-acre campus to generate approx 300 direct jobs and 1000 indirect jobs by 2028.

Meta and Sify have partnered to build a 500 megawatt datacenter at Paradesipalayam, Andhra Pradesh.

Sify is developing a 50 MegaWatt Edge datacenter at Rushikonda, Andhra Pradesh.

Site Selection Criteria for Data Centers

When business organizations plan to set up a datacenter, they go through a lot of criteria to choose the site as it is meant to be a long-term project worth a huge amount of investment. Recently, Anthropic chose Texas, NewYork to build a new datacenter project worth $50 Billion.

• Land / Real Estate / Infrastructure Cost & Availability
• Connectivity & Network Infrastructure
• Latency & Proximity to Market
• Power Availability, Cost & Reliability
• Climate / Cooling / Environmental Conditions
• Risk of Natural Disasters & Environmental Risk
• Scalability & Future Growth Potential
• Regulatory / Legal / Compliance / Incentives
• Security & Reliability (Physical + Cyber + Operational)
• Availability of Skilled Labor & Supporting Ecosystem

Land, Real Estate Availability and Cost Requirements

The site needs initial space to build the infrastructure with a potential to expand the area based on the growing demands. Lands should be available at an affordable cost to have the initial lower expenditure.

In the year 2025, the government of Andhra Pradesh has passed a Government Order that lands will be made available at 0.99 Rupees per acre to attract major investments.

For Google’s datacenter project, the release states that:

• 25% discount on land cost for the 480 acres allotted across different locations.
• SGST reimbursements on construction and leasing for 10 years.

Connectivity & Network Infrastructure

Closely located to major internet hubs and fiber optic network path is essential for high bandwidth and low latency. Undersea cable landing points in Vizag will enhance connectivity.

Cooling and Environmental Costs

In datacenters, cooling is important to prevent overheating of the equipment thereby ensuring reliability and longevity of the equipment and maintaining performance.

Liquid cooling, AI driven power management is necessary for handling high density racks. Access to water and stable cooler climates reduces cooling costs naturally. Of late, waterless techniques, air cooling is also being used in drought prone areas enabling setting up datacenters across the landscapes.

Visakhapatnam is closer to sea on India’s east coast optimally placing it to be a natural option for businesses to set up a datacenter.

Power Availability and Sustainability

As we know data centers consume a lot of electricity and look for reliable, clean sources of energy. The site will be chosen for major substations / power plants which can meet the capacity requirement and source of backup power. Powergrid should be stable and reliable meeting the standards and handling voltage fluctuations. For the upcoming AI data centers, GigaWatts of power is required.

Towards Google’s project, Andhra Pradesh government has released a government order that:

• The project will receive a ₹1 per unit power tariff subsidy for 15 years, capped at a total incentive of ₹4,800 crore.
• 10% capital subsidy on plant and machinery for 10 years.

Google Cloud has partnered with AdaniConneX as a partnership to ensure that setting up power plants through clean energy generation using renewable sources like solar, wind. Google has allocated $2 Billion out of the total investment to focus on sustainable energy requirements thereby making it a Renewable energy data center.

Risk of Natural Disaster and Environmental Risk

Usually for datacenter projects, locations which have low risk to hurricanes, wildfire, seismic conditions like earthquakes will be preferred.

Security and Reliability

Physical security like access controls to buildings, surveillance and network security, disaster recovery are all security aspects of a datacenter setup project.

Flooring capacity, ceiling height and power density are the factors crucial for any datacenters.

Large organizations undertaking such major projects also prioritize political stability in the region to ensure long-term business continuity.

Regulatory, Legal and Compliance

Datacenters should ensure that data is secured and data privacy is maintained. According to the regions of setup, local laws like GDPR, HIPAA, PCI DSS should be strictly followed and compliant to.

Talent Pool and Local Ecosystem

India has got a mix of talent in software, electrical, operations field to ensure datacenter projects can be carried out in the country.

Industry standards like the Uptime Institute's Tier Standards and the international ISO/IEC 22237 framework guide data center design and operations, helping inform site selection decisions.

People interested in working on data center projects can pursue certifications such as Certified Data Center Professional (CDCP), Certified Data Center Specialist (CDCS), and Cisco Data Center certification.

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