Andhra Pradesh has approved a ₹31,387 crore investment by AM AI Factory Pvt Ltd to establish a 512-megawatt (MW) green integrated artificial intelligence data center in Visakhapatnam district. The project will be located at Amanam village in Bheemunipatnam mandal and is expected to create employment for up to 1,000 people. The state government’s approval was issued through a Government Order, with IT Secretary Bhaskar Katamneni confirming the project and its implementation timeline.
The facility is expected to be completed within two years and four months. The project is being developed under Andhra Pradesh’s Data Centre Policy 4.0 (2024-29) and has been categorized as a Mega Project. The government has approved both non-fiscal and fiscal incentives covering power infrastructure, water supply, stamp duty and electricity duty, among other support measures.
₹31,387 Crore AI Data Center Gets State Approval
The approved investment makes the project one of the largest newly sanctioned data center developments in Andhra Pradesh.
The facility will have a planned capacity of 512 MW, a scale designed to support large amounts of computing infrastructure required for AI workloads. AI data centers require substantially more electricity and specialized computing infrastructure than conventional data centers because they are designed to handle high-performance workloads such as model training, inference and other data-intensive applications.
Key Details Of The Project
| Particular | Details |
|---|---|
| Developer | AM AI Factory Pvt Ltd |
| Project | Green Integrated AI Data Center |
| Location | Amanam village, Bheemunipatnam mandal |
| District | Visakhapatnam, Andhra Pradesh |
| Planned capacity | 512 MW |
| Investment | ₹31,387 crore |
| Employment potential | Up to 1,000 jobs |
| Project category | Mega Project |
| Policy | Andhra Pradesh Data Centre Policy 4.0 (2024-29) |
| Completion timeline | 2 years, 4 months |
| Expected completion | Around December 2028 |
The project is expected to strengthen Visakhapatnam’s position as an emerging destination for large-scale digital infrastructure.
Why 512 MW Matters For AI Infrastructure
The 512-MW capacity is one of the most significant aspects of the project.
Electricity is a critical input for AI data centers because high-performance accelerators and supporting systems consume large amounts of power. Cooling systems, networking equipment, storage and other infrastructure add to the total energy requirement.
A large power allocation therefore allows an AI data center to operate a substantial computing footprint.
How An AI Data Center Uses Power
Electricity Supply
│
▼
Power Distribution
│
┌─────┼────────┐
▼ ▼ ▼
AI Cooling Networking
Chips Systems Systems
│
▼
AI Computing
│
├── Model Training
├── AI Inference
├── Cloud Services
└── Data Processing
The green designation also indicates that the project is being developed with an emphasis on cleaner energy infrastructure.
Visakhapatnam Is Becoming An AI Infrastructure Hub
The approval adds another major technology investment to Visakhapatnam’s growing AI and data-center ecosystem.
Google, in partnership with AdaniConneX and Nxtra by Airtel, is already developing a separate gigawatt-scale AI hub in Visakhapatnam as part of Google’s approximately $15 billion India investment plan for 2026-2030. Google broke ground on that project in April 2026.
The two projects should not be confused. The newly approved ₹31,387 crore facility is being developed by AM AI Factory Pvt Ltd, while Google’s AI hub is a separate project involving Google, AdaniConneX and Airtel Nxtra.
Major AI Infrastructure Developments In Visakhapatnam
| Project | Developer/Partners | Announced Scale |
|---|---|---|
| AM AI Factory facility | AM AI Factory Pvt Ltd | 512 MW |
| Google AI Hub | Google, AdaniConneX, Airtel Nxtra | Gigawatt-scale |
| Google investment | About $15 billion over 2026-30 | |
| AM AI Factory investment | AM AI Factory | ₹31,387 crore |
The concentration of large projects could help create an ecosystem around power, connectivity, cloud computing, construction, equipment suppliers and technology services in the region.
Government Offers Power And Water Support
The Andhra Pradesh government is providing infrastructure support to help the project move forward.
Non-fiscal incentives include support for power infrastructure and assured water supply. The government has also approved other infrastructure-related measures connected with the development of the facility.
This type of support is particularly important for data centers because reliable electricity and cooling-related water infrastructure are essential for continuous operations.
Government Support For The Project
| Support Area | Approved/Reported Support |
|---|---|
| Power | Power infrastructure facilitation |
| Water | Treated water supply |
| Roads | Infrastructure support |
| Stamp duty | Exemption, subject to approved limits |
| Electricity duty | Exemption |
| Other incentives | Policy-linked fiscal support |
A separate report on the government order said the package includes a stamp-duty exemption capped at ₹16 crore, a 10% capital subsidy on plant and machinery capped at ₹300 crore over 10 years, and 100% net SGST reimbursement during construction capped at ₹490 crore. It also reported long-term exemptions related to transmission, wheeling and cross-subsidy charges.
Project Could Be Completed By December 2028
The government order gives AM AI Factory two years and four months to establish the facility.
Based on the timeline reported by NewsBytes, this would put the expected completion around December 2028.
The timeline is significant because AI infrastructure demand is expanding rapidly. Developers are racing to secure power, land, connectivity and equipment as technology companies increase spending on AI computing.
Project Timeline
August 2026
State Government Approval
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▼
Project Development
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Power + Water + Infrastructure
│
▼
AI Data Center Construction
│
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Two Years + Four Months
│
▼
Target Completion
Around December 2028
The actual operational date could depend on construction, equipment procurement, grid connectivity and other project-development milestones.
Up To 1,000 Jobs Expected
The project is expected to create employment opportunities for up to 1,000 people.
Data centers typically require specialized workers across engineering, operations, electrical systems, cooling, networking, security, maintenance and information technology.
The direct employment figure is relatively small compared with the size of the investment, but large data center projects can also generate indirect employment through construction, equipment installation, facility management and supporting services.
Potential Employment Areas
| Area | Potential Roles |
|---|---|
| Data center operations | Facility and infrastructure teams |
| Electrical systems | Engineers and technicians |
| Cooling | HVAC and thermal-management specialists |
| Networking | Network engineers |
| IT | Infrastructure and systems professionals |
| Security | Physical and digital security |
| Maintenance | Technical support teams |
| Construction | Project and infrastructure workforce |
The state is also hoping that large technology investments will stimulate wider economic activity around Visakhapatnam.
Data Centers Can Create A Broader Economic Ecosystem
A ₹31,387 crore investment does not only create demand inside the data center itself.
Large facilities require construction companies, electrical equipment, power systems, cooling equipment, fiber connectivity, security services, maintenance providers and other suppliers.
Once operational, they also require continuous technical and facility-management services.
Potential Economic Impact
₹31,387 Crore Investment
│
▼
Data Center Construction
│
┌────────┼─────────┐
▼ ▼ ▼
Power Equipment Construction
│ │ │
└────────┼─────────┘
▼
Local Suppliers
│
▼
Jobs + Services
│
▼
Regional Economic Activity
The broader impact will depend on how much of the supply chain is sourced locally and how many associated businesses develop around the project.
Green Infrastructure Is Becoming More Important
The project has been designated as a green integrated AI data center, highlighting the growing importance of energy efficiency and clean power in the data-center industry.
AI infrastructure can require enormous amounts of electricity. As countries expand AI capacity, governments and technology companies are increasingly looking at renewable power, energy storage, transmission infrastructure and efficient cooling systems.
The green focus is therefore becoming a strategic consideration rather than simply an environmental feature.
Power Availability Will Be Critical
For a 512-MW facility, reliable power infrastructure will be one of the project’s most important requirements.
A data center cannot operate effectively if electricity supply is unstable. AI workloads also require consistent computing availability, meaning power interruptions can affect both performance and operational costs.
The state government’s decision to facilitate power infrastructure is consequently a key part of the project approval.
Data Center Infrastructure Requirements
| Infrastructure | Why It Matters |
|---|---|
| Electricity | Runs AI computing equipment |
| Cooling | Controls heat generated by processors |
| Water | Supports approved cooling and facility requirements |
| Fiber | Enables high-speed connectivity |
| Roads | Supports construction and operations |
| Backup systems | Maintain continuity |
| Power transmission | Provides reliable large-scale supply |
The availability of these systems will be crucial as the facility moves from approval into construction.
AI Demand Is Driving Large Data Center Investments
The project comes at a time when AI companies, cloud providers and technology firms are investing heavily in computing infrastructure.
Training increasingly capable AI models requires large clusters of accelerators. Inference workloads are also expanding as AI applications are adopted by businesses and consumers.
This is creating demand for facilities that can provide large amounts of power and computing capacity in locations with suitable connectivity and infrastructure.
The scale of the Andhra Pradesh project reflects the growing importance of physical infrastructure in the AI economy.
Visakhapatnam Could Gain From Digital Connectivity
Data centers also depend heavily on high-speed network connectivity.
Google’s separate Visakhapatnam AI hub includes plans for a major subsea cable gateway and expanded fiber infrastructure. Google said the additional subsea connectivity would create route diversity and improve the resilience of India’s digital backbone.
The development of multiple large digital infrastructure projects could therefore strengthen Visakhapatnam’s broader connectivity ecosystem.
However, the AM AI Factory project’s specific connectivity arrangements were not detailed in the government approval reports reviewed for this article.
Environmental Concerns Will Remain Important
Large AI data centers also face questions around energy consumption, water use and their impact on surrounding communities.
Those concerns are particularly relevant in Visakhapatnam because Google’s separate $15 billion AI hub has already faced opposition from environmental activists over water resources and potential impacts on nearby wildlife areas. Google and the Andhra Pradesh government have disputed or addressed several of those concerns, while legal proceedings remain ongoing.
The environmental issues surrounding Google’s project are separate from the newly approved AM AI Factory facility. However, they illustrate the broader challenges that Andhra Pradesh will need to manage as it attracts multiple energy-intensive data center projects.
Andhra Pradesh Is Targeting High-Tech Investment
The AI data center approval fits into Andhra Pradesh’s broader strategy of attracting large technology and electronics investments.
The state government has been positioning Visakhapatnam as a technology and digital-infrastructure hub, while policy incentives are being used to attract capital-intensive projects.
The Data Centre Policy 4.0 provides a framework for offering infrastructure and financial incentives to large data-center developments. The AM AI Factory project has been classified as a Mega Project under that policy.
Andhra Pradesh’s Data Center Strategy
Investment Incentives
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▼
Power + Water Infrastructure
│
▼
Large Data Centers
│
▼
AI / Cloud Computing Capacity
│
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Digital Infrastructure Growth
│
▼
Technology Ecosystem
│
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Jobs + Regional Development
The success of this strategy will depend on whether approved investments move from government orders to completed facilities and sustained operations.
The Project Adds To India’s AI Capacity
India’s AI ambitions require more than software and talent.
The country needs data centers, accelerators, electricity, cooling systems, fiber networks and other physical infrastructure to support the development and deployment of AI systems.
A 512-MW facility therefore represents a significant addition to the country’s potential computing infrastructure.
At the same time, the project is only one component of a much larger national buildout involving cloud companies, technology firms, telecom operators and data-center developers.
The Bigger Picture
Andhra Pradesh’s approval of AM AI Factory’s ₹31,387 crore green integrated AI data center marks another major step in Visakhapatnam’s emergence as a potential AI infrastructure hub. The 512-MW facility, which is expected to create up to 1,000 jobs, will add substantial computing capacity while generating demand for power infrastructure, connectivity, construction and specialized technical services.
The development is particularly significant because it comes alongside Google’s separate gigawatt-scale AI hub in the city. Together, the projects point to a growing concentration of AI infrastructure in Andhra Pradesh. However, the expansion also brings challenges around electricity, water, environmental sustainability and execution. The state’s ability to provide reliable infrastructure while managing local resource concerns will be critical to turning these large investment announcements into long-term economic benefits.
Looking Ahead
The immediate priority for AM AI Factory will be moving from government approval to construction and securing the infrastructure needed for a 512-MW facility. With a two-year-and-four-month completion timeline, the project could potentially become operational around the end of 2028 if development proceeds as planned. The availability of power, water, connectivity and specialized equipment will determine how quickly the facility can be built and commissioned.
For Andhra Pradesh, the larger opportunity is to build an ecosystem around Visakhapatnam rather than simply host individual data centers. If the state can attract supporting technology companies, renewable-energy projects, fiber networks, equipment suppliers and skilled workers, the region could become an important node in India’s expanding AI economy. At the same time, responsible management of energy, water and environmental resources will be essential as the scale of AI infrastructure continues to grow.
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