Lenovo to build new AI servers in India’s south

FACTORY SHIFT:
While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions

Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse.

The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones.

The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI.

Photo: Reuters

Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks in the past few 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 would make its entire stack of hardware in India for the domestic as well as export markets, underscoring the country’s importance for the company.

While India’s tech manufacturing sector is still small compared with China, it has been catching up and now makes increasingly sophisticated products such as iPhones. AI servers represent another milestone, showing that India can offer an alternative to regions with more established high-end manufacturing industries.

Taiwan currently produces the bulk of the world’s AI servers, which are used by technology giants such as Amazon.com Inc, Microsoft Corp and Nvidia Corp.

However, with geopolitical tensions on the rise between 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 (富士康科技集團) last year predicting that annual sales of AI servers could reach US$150 billion by 2027.

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