Google will invest $15 billion over the next five years to set up an artificial intelligence data centre in Andhra Pradesh, marking its biggest investment in India.

The US technology company announced the plan at an event in New Delhi attended by India’s infotech and finance ministers. Google Cloud CEO Thomas Kurian said the new facility in Andhra Pradesh would be the company’s “largest AI hub” outside the United States.

“This long-term vision we have is to accelerate India’s own AI mission,” Kurian said.

The data centre campus, located in the port city of Visakhapatnam, will have an initial capacity of 1 Gigawatt. Google’s investment is part of its global plan to spend about $85 billion this year on data centre expansion as technology firms race to meet rising demand for AI services.

The announcement comes at a time of tension between New Delhi and Washington over tariffs and a stalled trade deal, as prime minister Narendra Modi has urged a boycott of foreign goods.

US-based companies are facing boycott calls in India, with business executives and Modi supporters protesting against a 50 per cent tariff on imported Indian goods.

“This initiative creates substantial economic and societal opportunities for both India and the United States,” Google said in a statement, without mentioning the tariffs.

According to two sources cited by Reuters, Indian officials have recently met US company executives privately to assure them of a supportive business environment despite concerns over tariffs.

Microsoft and Amazon have already invested billions in Indian data centres, tapping into a market of nearly one billion internet users.

Indian industrialists Gautam Adani and Mukesh Ambani have also announced data centre investments. Adani Group and Airtel have partnered with Google to develop infrastructure for the new project, which includes construction of an international subsea gateway.

AI development requires large computing power, increasing demand for specialised data centres that link thousands of chips in clusters.

Earlier, state officials had estimated the Google project’s cost at $10 billion and said it would create about 188,000 jobs.

Google’s parent company, Alphabet Inc, considers India a key growth market. YouTube has its largest user base in India, and Android dominates smartphone usage. The company, however, faces antitrust investigations in the country and a lawsuit from a Bollywood couple challenging YouTube’s AI policy.