When Google announced its $15 billion Artificial Intelligence data hub in Visakhapatnam, few expected it to trigger a political and economic storm across South India. But the deal, hailed as a once-in-a-generation win for Andhra Pradesh, has ignited a fierce contest among Karnataka, Tamil Nadu, and Andhra Pradesh for the crown of South India’s ‘Investment King’.
The spark: Andhra’s Google AI Hub
Under Chief Minister Nara Chandrababu Naidu’s government, Andhra Pradesh secured one of Google’s biggest global AI investments, promising thousands of jobs and advanced research facilities along the coast.
The Visakhapatnam AI Hub, expected to be operational by 2027, positions Andhra as a serious player in the high-tech economy, until now dominated by Bengaluru and Chennai.
But as soon as the announcement was made, political tremors rippled through neighbouring states. Karnataka’s ministers questioned the ‘freebie culture’ behind Andhra’s win, while Tamil Nadu found itself battling confusion over its own high-profile Foxconn investment claims.
Loading ...Karnataka pushes back: ‘You can’t match Bengaluru’
Karnataka’s Deputy Chief Minister DK Shivakumar was quick to dismiss talk of competition. “You can’t match Karnataka. Let Andhra do what they want — there’s no comparison,” he said, defending Bengaluru’s reputation as India’s original tech capital.
However, Karnataka’s IT ecosystem appears rattled by Andhra’s aggressive pitch. State officials privately admit that Visakhapatnam’s incentives, such as 100% SGST reimbursement, 25% discounts on land, water, and power tariffs, were hard to match.
IT Minister Priyank Kharge acknowledged that Karnataka would not offer ‘massive financial handouts’ to attract companies already queuing up to invest in Bengaluru. “We don’t need to give away ₹22,000 crore in subsidies for a company like Google. Bengaluru already hosts thousands of global tech firms,” he told reporters.
Despite the rhetoric, analysts note that Andhra’s bold incentive model may have shifted investor psychology, particularly among AI and semiconductor firms seeking fresh ecosystems beyond crowded metros.
Also read Visakhapatnam Google AI Hub to redefine India’s role in Global Tech
Andhra’s defence: ‘Speed of Doing Business’
From Vijayawada, Andhra Pradesh’s Information Technology Minister Nara Lokesh defended the State’s strategy:
“What’s wrong with offering incentives if it brings jobs and global recognition? We’re the youngest state, and we believe in the speed of doing business,” he said, adding that Andhra Pradesh is traffic-free, investor-ready, and strategically placed along India’s longest coastline.
Lokesh, often dubbed the ‘CEO of Andhra 2.0’, has set his sights on transforming Visakhapatnam, Tirupati, and Sri City into a tri-corridor of AI, aerospace, and precision engineering. The State has already attracted major industrial names like Raymond Group and Adani Data Parks, further boosting its credentials.
Tamil Nadu’s Foxconn claims and confusion
While Andhra and Karnataka traded jabs, Tamil Nadu found itself in a political tussle over the Foxconn investment controversy.
Chief Minister MK Stalin claimed the State had secured a fresh ₹15,000 crore investment from Foxconn, only for the company to issue a clarification denying any ‘new commitments’.
The opposition AIADMK and BJP quickly pounced, accusing the DMK government of misleading the public.
“It’s a shame. The government should hang its head for lying about Foxconn’s investment,” said a prominent BJP Tamil Nadu leader on a national channel. The DMK, however, fired back, accusing its rivals of refusing to acknowledge Tamil Nadu’s industrial progress.
Political sparring aside, Tamil Nadu remains a manufacturing powerhouse, home to major automotive, EV, and electronics clusters.
As one Chennai-based analyst put it, “Foxconn may have paused its new investment, but the state’s industrial base is still deeper than any other in the South.”
Beyond rivalry: The race for the future
Despite the friction, many economists see the Southern investment race as a positive sign. Healthy competition, they argue, forces states to modernise policies, improve infrastructure, and court high-value industries, from AI and semiconductors to aerospace and EVs.
Karnataka is developing an AI City in Ramanagara, while Andhra Pradesh’s Visakhapatnam hub will anchor India’s east coast innovation corridor. Tamil Nadu, meanwhile, is doubling down on EV and electronics exports through Chennai and Coimbatore.
The bigger picture
South India contributes nearly 35% of India’s total industrial output, with all three states leveraging their unique strengths: Karnataka’s IT base, Tamil Nadu’s manufacturing edge, and Andhra’s proactive investment policies.
Political soundbites aside, the numbers tell a story of regional dynamism, not division. And as global tech giants hunt for the next frontier of innovation, the real winner may not be a single state — but South India itself.
