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Google will invest $10 billion into building new data centers in southern India, according to local officials, marking one of its largest investments in the South Asian nation as tech giants scramble to meet the exploding demand for AI. 

Minister for Human Resources Development of the Indian state of Andhra Pradesh, Nara Lokesh, announced Monday that Google and his government will sign a memorandum for a 1 gigawatt project in the state with an investment of $10 billion. 

The deal — to be signed Tuesday — comes after “a year of intense discussions and relentless effort,” and “is just the beginning,” Lokesh said in a post on the social media platform X. 

The Indian outlet Economic Times previously reported that the investment would be made by Google’s Indian subsidiary Raiden Infotech, which plans to develop three campuses across the city of Visakhapatnam.

According to another report from ET on Tuesday,  state officials planned to continue doubling down on such projects and to significantly scale up the state’s computing capacity over the next three years.

Companies are amping up investments in infrastructure to keep pace with surging global demand for cloud services as AI services become increasingly popular.

As part of its second-quarter earnings in July, Google increased its forecast for capital expenditures in 2025 to $85 billion, up from $75 billion in February, due to “strong and growing demand for our Cloud products and services.”

That same month, the company also announced plans to invest $25 billion in data center and artificial intelligence infrastructure over the next two years in states across the biggest electric grid in the U.S.

India is increasingly attracting multinational players, such as Microsoft and AWS, to invest in the country’s cloud and AI infrastructure.