Hyderabad leads India's emerging data centre hubs as AI investment reshapes the map

India's data centre geography is shifting, with Hyderabad pulling ahead as the country's leading new hub, even as cities such as Visakhapatnam and Dholera in Gujarat begin to attract large-scale commitments from global technology companies.

Google, in partnership with Adani group and Bharti Airtel, has announced a 1GW data centre in Visakhapatnam, while Meta India is planning a 500MW facility with Sify Technologies Ltd. Industry stakeholders said Visakhapatnam would remain an emerging market, even as Google's planned $15 billion investment could accelerate its development.

Large contiguous sites, prospective power availability and strong demand from hyperscalers and AI companies are supporting projects that are very large relative to Hyderabad's existing base, according to Kashyap Kompella, analyst and founder of technology consultancy RPA2AI Research.

The activity has led to the emergence of new data centre hubs such as Dholera in Gujarat and Visakhapatnam in Andhra Pradesh, with 232MW of new capacity expected to be added by these new regions over the next four years.

India's data centre industry is expected to surge from 1.6GW as of June 2026 to 6GW by 2029, requiring about $110 billion in capital and driven by AI workloads and hyperscale cloud deployments. A 20-year tax holiday for foreign cloud service providers, announced in the Union Budget, has attracted over $50 billion in foreign capital commitments.

The expansion of new hubs faces a key constraint in power infrastructure. A lack of availability of transmission lines, substations and transformers is hindering the ability of data centres to expand in newer regions, including outskirts of established hubs.

Most states have brought out policies incentivising data centre development. Telangana released its own data centre policy in 2016, boosting development in the sector.

The data centre boom has also created openings for equipment manufacturers, with firms such as Cummins India, Kirloskar Oil Engines and Sterling Green Power Solutions eyeing data centres as a key revenue driver.