Lenovo Group is in progress building artificial intelligence (AI) servers in India, the company mentioned that it has started making large, powerful computers in Pondicherry, south of India, moving beyond products such as laptops and smartphones. The company also mentioned building its facilities, including a research lab focusing on AI in the Bengaluru region.
Those decisions form part of a broader shift as Lenovo positions itself for an anticipated boom in AI-empowered personal computers and devices. The company will invest US$1 billion globally over the next two years in researching and developing AI platforms and hardware, said Amar Babu, Lenovo’s Asia-Pacific president.
Lenovo’s plans also mark another win for India as Prime Minister Narendra Modi tries to attract more technology investment. While India’s tense relationship with China has suffered setbacks in recent years, global tech companies see it as an attractive option to build out operations as Beijing and Washington are mired in a trade war.
The servers perform the computations needed to run services including generative AI, made famous by apps such as ChatGPT. The addition of AI servers means Lenovo will make its entire stack of hardware in India for the domestic and export markets, underscoring the country’s importance for the company. AI servers also represent another landmark, showing India can offer an alternative to regions with more established high-end manufacturing industries. While India’s tech manufacturing sector is comparatively smaller than China's, it has been catching up and now makes increasingly sophisticated products such as Apple’s iPhones.
The country is also a fast-growing market in its own right. India's AI demand is currently US$17 billion and growing 25 percent to 30 percent annually, Babu said. Taiwan currently produces the bulk of the world’s AI servers, which are used by technology giants such as Amazon.com, Microsoft, and Nvidia. But with geopolitical tensions on the rise between mainland China and the West, companies are under pressure to shift manufacturing outside Taiwan. Demand for generative AI tools and applications has sent the need for related hardware soaring, with electronics manufacturer Foxconn Technology Group last year predicting that by 2027 the annual sales of AI servers could touch US$150 billion