Google said yesterday it would invest $15 billion over five years to set up an artificial intelligence data centre in India’s southern state of Andhra Pradesh, its biggest ever investment in the world’s most populous nation.

The US tech giant’s plan comes amid a tense diplomatic standoff between New Delhi and Washington over tariffs and a stalled trade deal, as Prime Minister Narendra Modi has urged a boycott of foreign goods.

According to a Reuters report, Indian Infotech and Finance Ministers (Ashwini Vaishnaw and Nirmala Sitharaman) attended the New Delhi event at which Google Cloud CEO Thomas Kurian said the data centre in Andhra Pradesh (Visakhapatnam) 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. Google has committed to spending about $85 billion this year to build data centre capacity as big tech companies invest heavily to build new infrastructure in their competition to meet booming demand for AI services.

The data centre campus in the port city of Visakhapatnam will have an initial capacity of 1 Gigawatt. “This initiative creates substantial economic and societal opportunities for both India and the United States,” Google said in a statement, without referring to the tariffs.

In recent weeks, Indian officials have privately met many executives of US companies to say they are committed to providing an easy business environment despite the discontent over US tariffs, two sources told Reuters on condition of anonymity.

Microsoft and Amazon have already poured billions into building data centres in India, a critical growth market where nearly a billion users access the internet. Indian billionaires Gautam Adani and Mukesh Ambani have also unveiled investments in building capacity for data centres.

The Adani Group and India’s Airtel have partnered with Google to build the infrastructure for its new project (in Andhra Pradesh), which also includes construction of a new international subsea gateway.

Meanwhile, an ANI report quoted Gopal Vittal, Vice Chairman and Managing Director of Bharti Airtel, as describing the partnership as “a defining moment in India’s digital future.”