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Vizag Data Centers Boon or Bane?
Are data centres proposed in Vizag a boon or bane? While experts welcome the announcements of tech giants for their potential to generate employment and trigger economic growth in the long run, and position the city as biggest data centre hub in India, activists flag concern over their adverse impact, particularly the stress they cause on resources such as water and power The year 2025 has seen the announcement of several big-ticket projects in Visakhapatnam. While the steel plant being set up by ArcelorMittal Nippon Steel in Anakapalli at a cost of over ₹1.5 lakh crore in phases is among them, what has truly dominated the investment landscape is the announcement of massive AI data centres by tech giants such as Google, Sify, and Reliance. Anchoring these investments is Google, which will set up a 1 GW AI data hub through its subsidiary, Raiden Infotech India Ltd., with an investment of about ₹88,000 crore. Google is partnering with AdaniConneX and Airtel, and the project will come up across three locations — Tarluvada, Adavivaram, and Rambilli — along with a new international subsea gateway anchored by multiple cable landings. Meta–Sify has announced a 500 MW facility at Paradesipalem with an investment of ₹15,266 crore, which includes the landing of a water-worth subsea cable. Sify Edge Data Centre is planning a 50 MW AI Edge facility with an open cable landing station at Rushikonda–Madhurawada, with approvals in place for expansion up to 550 MW in total. Reliance Industries has also announced a 1 GW AI data centre, while CtrlS is planning a 300–350 MW hyperscale data centre. If all these data centres are established by 2030, Visakhapatnam will be home to about 2.5 to 2.8 GW of data centre capacity, possibly second only to Virginia in the United States, which houses the world’s largest data centre cluster with 6.6 GW. ‘Need of the hour’ “If the State government’s plans materialise, Visakhapatnam will not only emerge as the biggest data centre hub in India but also scale up to 6 GW over the next 10 years,” says Kalyan Mangalapalli, a deep-tech expert. According to Mr. Kalyan, data centres are the need of the hour, which align well with both the State and Union governments’ plan for technological upgradation. “Data centres cater to the escalating demand for cloud-based computing, digitised record storage, and online services. They provide reliable, scalable, and secure environment to store, process, and manage digital information — from e-mail and streaming services to e-commerce platforms and Artificial Intelligence applications. The demand for data centres in India is driven by initiatives such as Digital India and data localisation mandates, including the RBI’s 2018 directive and the Digital Personal Data Protection Act, 2025,” he says. Strain on resources But is the Port City suitable to house these data centres? It is a well-known fact that data centres are intensive consumers of power and water. Reports have indicated that residents in Indianapolis forced Google to relocate due to similar concerns. In Visakhapatnam, too, there is growing resistance based on these very issues. According to senior officials of the APEPDCL, the total power consumption of Visakhapatnam city during peak summer hours is around 1,300 MW. To support data centres, the city needs additional power generation capacity, followed by construction of equivalent substations and the laying of 400–785 kV transmission lines. “Google, which is committed to net-zero norms, has stated that it will rely on low carbon energy such as solar power,” Mr. Kalyan said. However, solar and wind energy alone may not be sufficient to power such large facilities. Given its net-zero commitment, Google is unlikely to depend on thermal power and may, instead, explore alternatives such as green hydrogen, nuclear energy, on-site renewable generation with battery energy storage systems, or gas-powered micro-grids. According to APEPDCL officials, both Google and Reliance have committed themselves to generating solar power. However, they point out that generating 1 MW of solar power requires about five acres of land. “Where is that much land available?” they question. Water availability is another major concern. Visakhapatnam’s total daily water consumption is around 400 million litres per day (MLD). Data centres are significant water consumers, and running 2.5 GW of data centres require approximately 30 million litres per day — nearly 10% of the city’s current water consumption. Mr. Kalyan points out that the GVMC is planning 100-MLD large desalination plants to supplement their water requirements. “Keeping these issues in mind, we have filed an RTI plea seeking disclosure of details of the MoUs signed between the State government and the companies,” says Chakradhar Buddha of LibTech, an NGO. “However, our request has been rejected. We want clarity on power and water supply commitments, as well as employment generation,” he says. ‘Address challenges’ It is true that data centres do not generate large-scale direct employment once operational. However, there will be significant employment during the construction phase. More importantly, the long-term economic impact lies in the ripple or spillover effect. “Data centres function much like infrastructure projects such as roads and rail networks. They enable the entry of companies and tech giants that depend on high bandwidth and low latency,” says Mr. Kalyan. Technology and IT firms, as well as financial giants such as JP Morgan, are highly sensitive to Internet speed, where even minor latency can be a major disadvantage. Once data centres are operational, they can open the gates for such companies to invest in Visakhapatnam, benefiting from millisecond-level data speeds. “In the long run, both the city and the State stand to gain in terms of employment generation and overall economic development, provided power and water challenges are adequately addressed,” observes Mr. Kalyan. -
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