- The Core
- Posts
- Second Cyberabad Coming?
Second Cyberabad Coming?
In partnership with
Good Morning. Over two decades after ushering in a tech boom, Andhra Pradesh's N Chandrababu Naidu is now betting big on another tech shift. This time it's AI data centres. From Reliance Industries, the Adani Group, to Google, investments are pouring in, promising a new future. While this is exciting, AI comes with challenges that the early 2000s tech boom didn't — limited job creation possibilities and environmental strain. Will Naidu's bet still pay off?
Indian benchmark indices almost reached record highs on Wednesday. The BSE Sensex closed at 85,609.51, gaining 1,022.5 points or 1.21%. The NSE Nifty50 closed at 26,205.3, 320.5 points or 1.24% higher.
In other news, the Indian government has approved a scheme to build the country's rare earth magnet capacity. Meanwhile, there’s a shift in how India’s rich spend.
THE TAKE
Can Naidu’s New AI Bet Deliver What His Last Tech Boom Didn’t?
The global race to build the data centres that power artificial intelligence (AI) has arrived in India. It has now reached the coastal state of Andhra Pradesh, pulled in by an old hand at the game.
A joint venture of Reliance Industries, Brookfield and Digital Realty has just announced an $11 billion plan to construct a sprawling, “AI-native” data centre in Visakhapatnam.
This comes just a month after Google and the Adani Group declared a similar $15 billion investment in a data centre in the same city.
Birth Of Cyberabad
Suddenly, a state often overlooked in India’s tech narrative is at the epicentre of a $25 billion bet on the nation’s digital future.
The man credited with this coup is the state’s chief minister, N Chandrababu Naidu.
Two decades ago, as the leader of a united Andhra Pradesh which included the now distinct state of Telangana and its capital Hyderabad, he waged a successful campaign to pull investment away from Karnataka.
He pitted himself against Bangalore, the country’s established tech capital, with the slogan “Bye Bye Bangalore, Hello Hyderabad.”
His understanding of what built a tech ecosystem was strikingly granular.
In a 2004 interview, he explained to me and my colleagues that Hyderabad, the state capital at the time, needed a vibrant nightlife to attract the young men and women who would work for global tech firms.
It was a prescient, if unconventional, insight for an Indian politician at the time, particularly one as rustic as Naidu.
The gamble worked. American giants like Microsoft and GE were among the first to plant their flags.
Microsoft’s 1998 development centre in Hyderabad, its first outside the United States, was widely attributed to Mr Naidu’s personal persuasion of Bill Gates.
Whole new districts, like the aptly named Cyberabad, sprouted from the ground.
Today, Hyderabad is a buzzing metropolis with robust infrastructure and a thriving economy that extends into pharmaceutical research and more, far beyond its original IT roots. The city’s explosive real estate growth — and prices — are a testament to its success.
Yet, that success did not translate into political victory.
In a move that stunned the urban commentariat, Naidu’s party was roundly defeated in the 2004 state elections. The reasons were complex — a mix of rural distress and anti-incumbency that his urban tech boom could not overshadow.
Naidu’s New Challenges
Now, twenty years later, he is back, and his target has shifted from software to the essential hardware of our time: data centres.
But this new prize comes with its own set of challenges.
The first is environmental. Data centres are notorious for their immense energy and water demands. As the economist and former Planning Commission member Mihir Shah and Sunil Mani recently argued in an article in Business Standard, the unchecked growth of these “water-guzzling” facilities could strain fragile coastal ecosystems.
From Britain to Singapore, communities have faced blackouts and water shortages driven by data centre expansion.
The authors rightly insist that India must integrate environmental sustainability from the start, demanding transparency on water footprints and pushing for renewable energy and advanced recycling. This is not a secondary concern; it is a prerequisite.
The second challenge is human.
Unlike the GE and Microsoft offices of the 2000s that created thousands of jobs for a young, educated workforce, data centres are not manpower-intensive.
They are vast and automated cathedrals of computing power.
The cruel irony is that the AI they empower is explicitly designed to eliminate jobs. We may not know the scale or the timeline, but the direction is clear. The economic transformation Naidu is chasing now may not generate the widespread employment that typically fuels political capital.
Naidu’s comeback is a masterclass in identifying a new growth engine for a state traditionally known as India’s “rice bowl.” He is pulling the data centre boom away from its traditional home on the west coast, where Mumbai alone hosts over half of India’s capacity.
He may well create an economic win for Andhra Pradesh. The investments are real, and the momentum is palpable.
Naidu is betting his and his state’s future on the power of AI. He must hope that this time, the rewards are not just monumental, but also palpable to the people he serves.
MESSAGE FROM OUR SPONSOR
Shoppers are adding to cart for the holidays
Peak streaming time continues after Black Friday on Roku, with the weekend after Thanksgiving and the weeks leading up to Christmas seeing record hours of viewing. Roku Ads Manager makes it simple to launch last-minute campaigns targeting viewers who are ready to shop during the holidays. Use first-party audience insights, segment by demographics, and advertise next to the premium ad-supported content your customers are streaming this holiday season.
Read the guide to get your CTV campaign live in time for the holiday rush.
CORE NUMBER
Rs 7,280 Crore
That’s the financial outlay of a scheme that Union Cabinet has approved to promote domestic manufacturing of rare earth permanent magnets (REPM), a critical input for electric vehicles, wind turbines and advanced electronics. Cleared at a meeting chaired by Prime Minister Narendra Modi, the scheme is aimed at strengthening India’s strategic materials ecosystem and reducing reliance on a few dominant global suppliers.
Fast Facts: Of the total outlay, Rs 6,450 crore has been earmarked as sales-linked incentives to be disbursed over five years, while Rs 750 crore will be offered as capital subsidy for setting up manufacturing facilities with a combined capacity of 6,000 MTPA. The capacity will be allocated to five beneficiaries, each eligible for up to 1,200 MTPA, through a global competitive bidding process.
Setup: The scheme will run for seven years, including a two-year gestation period to establish integrated REPM manufacturing units and five years of incentive disbursement linked to sales.
FROM THE PERIPHERY
Tesla’s New Sales Pitch
Tesla expects Indian buyers of its Model Y to recover nearly one-third of the vehicle’s Rs 60 lakh price through fuel and maintenance savings over four to five years, Reuters reported. India GM Sharad Agarwal said the Model Y also offers strong resale value and home charging that costs “one-tenth of petrol prices.”
What's Next? On Thursday, the company will open its first integrated Tesla Center at Orchid Business Park in Gurugram, offering retail, after-sales, delivery and charging facilities under one roof for customers across northern India. Since entering the market in July, Tesla has launched experience centres in Mumbai and Delhi and set up three charging sites.
Context: The US EV maker’s India debut has been marked by high pricing, with the Model Y costing about 70% more than in the United States due to India’s 100% import tariff on fully built cars — a levy Elon Musk has called among the steepest globally. Sales remain modest, with 118 vehicles registered in 2025, including 40 in October.
No More MRO Outsourcing?
French multinational aerospace company Safran expects its annual revenue from India to triple to over €3 billion by 2030, with half of that generated from operations inside the country, the company said on Wednesday. The announcement came as Safran inaugurated a €200 million MRO facility for engines, used in narrow-body commercial aircraft, in Hyderabad, expected to be operational next year.
How We Got Here: India’s MRO industry is projected to grow from $1.7 billion to $4 billion by 2031. However, high taxes, licensing hurdles, weak infrastructure and steep costs mean 80–85% of work still goes overseas — including nearly all engine servicing.
Fast Facts: The move signals a shift toward building India as a self-sustaining aviation ecosystem, rather than relying on offshore servicing. Prime Minister Narendra Modi urged Safran to expand into engine and component design, noting that although Indian airlines have ordered over 1,500 aircraft.
Oh, How the Ultra-Rich Spend!
Indians are earning more than ever, and they are spending differently on luxury than they would have a few years ago. The newly launched Kotak Private Luxury Index found that there was a marked shift in spending —from ownership to experience and towards more mindful living. It said that India's luxury market was headed toward an estimated $85 billion by 2030.
By the Numbers: The index reports a 6.7% annual rise and a 22% increase since 2022, signalling how quickly luxury prices have climbed. As India’s luxury market heads toward $85 billion by 2030, the data shows a shift in how the ultra-rich spend, moving from ownership to experiences and from material goods to mindful living.
Context: Luxury continues to outperform affordable and mass-premium segments, which face weak demand and cautious consumption. Bhavin Sejpal of EY said, “The 22% rise since 2022 signals a maturing luxury market that is resilient, diverse and driven by wealth creation.”
MESSAGE FROM OUR SPONSOR
Here’s an un-boring way to invest that billionaires have quietly leveraged for decades
If you have enough money that you think about buckets for your capital…
Ever invest in something you know will have low returns—just for the sake of diversifying?
CDs… Bonds… REITs… :(
Sure, these “boring” investments have some merits. But you probably overlooked one historically exclusive asset class:
It’s been famously leveraged by billionaires like Bezos and Gates, but just never been widely accessible until now.
It outpaced the S&P 500 (!) overall WITH low correlation to stocks, 1995 to 2025.*
It’s not private equity or real estate. Surprisingly, it’s postwar and contemporary art.
And since 2019, over 70,000 people have started investing in SHARES of artworks featuring legends like Banksy, Basquiat, and Picasso through a platform called Masterworks.
23 exits to date
$1,245,000,000+ invested
Annualized net returns like 17.6%, 17.8%, and 21.5%
My subscribers can SKIP their waitlist and invest in blue-chip art.
Investing involves risk. Past performance not indicative of future returns. Reg A disclosures at masterworks.com/cd
THE TEAM
✍️ Zinal Dedhia, Kudrat Wadhwa, Shubhangi Bhatia | ✂️ Rohini Chatterji | 🎧 Joshua Thomas
🤝 Reach 80k+ CXOs? Partner with us.
✉️ Got questions or feedback? Reach out.
💰 Like The Core? Support us.