Karnataka debates data centre push as Google picks Andhra over Bengaluru

He cited reports that a Google data centre project had moved to Visakhapatnam in Andhra Pradesh instead of Bengaluru.

Responding to the demand, Karnataka Minister for IT and Biotechnology Priyank Kharge said the Andhra Pradesh government had offered substantial subsidies for the project and stressed that Karnataka would pursue a more sustainable approach. "Data centres are important, but there are better ways to do it," he said.

Raising the issue during the Question and Answer session in the Assembly, Muniraju said Bengaluru, widely known as the IT capital, lacked dedicated parks for colocation and enterprise data centres.

"Bengaluru is known as the IT capital of the world. The IT boom is shifting to the northern part of the city. However, the same cannot be said when it comes to data centres. The government has not allotted dedicated data centre parks. Because of this, companies are forced to depend on private players and are facing several issues," he said.

Muniraju pointed out that major companies were moving to other cities. "The largest number of data centres are in Mumbai, while Chennai is in second position, and Delhi is in fourth position. Bengaluru has slipped to the fifth position. Whether it is social media, streaming platforms, AI systems or cloud computing, Bengaluru is number one in all these sectors. For all this, large data centres are required," he said.

He proposed establishing a major data centre park in Doddaballapur, north of Bengaluru, where large tracts of land have already been acquired for the Quin City project. "Major companies such as Amazon, Microsoft, Google, Oracle and Alibaba have their headquarters in Bengaluru. They should also have their data centres here. Hence, one data centre park should be allocated in Doddaballapur," he said.

Muniraju also pointed to developments in other cities. "Hyderabad is similar to Bengaluru, and several data centres have come up there. According to media reports, Google's data centre project has gone to Visakhapatnam. A $13-billion investment involving three Amazon projects has gone to Hyderabad, with those facilities set up on the outskirts of the city. Hence, efforts should be made to accommodate data centres in Doddaballapur," he said.

Replying to the concern, Kharge said the project in Visakhapatnam had been supported by major incentives.

"Everyone talks about Google moving to Visakhapatnam, but no one speaks about the cost at which it has gone there. The Andhra Pradesh government has given a subsidy of Rs 22,000 crore for the Google project. The land subsidy is 25 per cent. They have offered a Re 1 reduction in power tariff per unit for 15 years, a 10 per cent GST exemption for 10 years, 100 per cent exemption on stamp duty, and a 10 per cent capital subsidy on plant and machinery. The number of jobs being generated is only about 1,500," he said.

Kharge also highlighted the heavy resource requirements of data centres.

"Data centres are extremely power-sensitive. For a one-megawatt plant, we require around Rs 70 crore. In one acre of land, only a one-megawatt plant can be set up. We also need about 25 million litres of water per megawatt every year to run a data centre," he said.

"If one asks five questions on ChatGPT, about 500 ml of water is consumed. That is the scale of consumption. Now, with new technology, companies are using liquid cooling and treated water. That is why we will relook at our policy and come up with a sustainable data centre policy," he added.

According to the minister, 32 data centres are currently operating privately in Karnataka.

"We already have a Data Centre Policy and we are reviewing it. It is necessary to have data centres for AI, machine learning and other emerging technologies. But data centres are also major consumers of water and energy. In this background, our government is examining whether sustainable data centres can be promoted," he said.

Kharge said the revised policy would also encourage development beyond Bengaluru.

"Since the existing policy is two to three years old, we are planning to make the new policy more sustainable. Apart from Bengaluru, our focus is also on Mangaluru and the coastal areas. We are in discussions with private companies. Regarding land allotment in Doddaballapur, there is no shortage of land and under the policy, we will focus on bringing in as many data centres as possible. Our focus is also on development beyond Bengaluru," he said.

He added that hyperscale data centres may not suit Bengaluru due to resource constraints.

"What will suit Bengaluru is not hyperscale data centres because we do not have a port and there is also a shortage of water. Our focus is on small, medium and large data centres, but not hyperscale data centres," Kharge said.

- IANS