India has been wanting to be the new China for years. The Iran war is putting it on a plate

The iran war is demonstrating, once again, the fragility of globalization. Just look at this graph:

The price of a barrel of crude oil has rampaged because Iran is attacking refineries, the Strait of Hormuz through which 20% of the world’s crude oil passes It is abuzz and there is instability in the ‘oil well of the world’. Refineries are targetedbut also the new mine of the world economy: data centers. Iran has attacked data centers of Amazon in Saudi Arabia and Big Tech are setting their eyes on nearby countries where they can move.

And what is very attentive is an India that has been pursuing an ambitious goal for years: to become the new China. They have been tempting big technology companies for years and with the narrative of being a safe and reliable country in which to manufacture. The war in Iran is now giving it another argument: kamikaze drones do not fall in its data centers.

In short. Data centers have become critical infrastructure. They are from the moment you are investing in them. more than we invested to go to the Moonthe economy of some companies and countries is being linked to their success and, above all, they have been since the AI ​​fever has put the world of hardware in an alley. In war and love, anything goes (or so some apply), and this time we are seeing how they bomb schools, hotels and data centers.

On March 1 and 2, Iran attacked with its drones two of the Amazon Web Services, or AWS, facilities in the United Arab Emirates and another center in Bahrain. This has forced the technology company to pause activity in those facilities, asking that companies that had services running on their servers migrate to those in other countries.

Solutions. Latency plays a fundamental role in certain operations, so they must be servers that are relatively close to those that have been attacked. And that’s where they come into play both that Amazon has in India, specifically the one in Munbai and the one in Hyderabad. These are data centers from Amazon, yes, but the country has big plans to create an industrial fabric based on this type of infrastructure.

At the beginning of last year we echoed a mega data center hard to believe. When most of the world’s large facilities remain below 1 GW of energy capacity, an Indian company wants to create a single data center with a capacity of 3 GW. If we return to the Amazon centers in northern Virginia, in the United States, we see that about 300 installations add up to a total of 2.5 GW. And now India wants one to only have 3 GW. And it wants to have it by 2027, a date as ambitious as its own dimensions.

Rain of millions. It is estimated that such a facility would cost between 20,000 and 30,000 million dollars, but it is something that today’s India cares little about: they are burning money to attract industry and steal what they can from China. The country has been offering hundreds of millions of dollars to each technology company that wants to settle in its territory. It’s not just money. India is developingits market is growing and something important: young Chinese are increasingly more qualified and labor is getting more expensive.

A cheaper workforce in India, added to government incentives, are two powerful arguments for some giants in the technology sector to move to the country. And, little by little, they are achieving it. Xiaomi, Motorola and even Huawei manufacture complete models of some of their lines in India. Asus, HTC, Samsung, Microsoft and LG have plants for some parts and Apple has taken the production of parts to India. old iPhone models. Another one is Micron, one of the main players in the memory segment.

tempting everyone. The country wants more and it is gone sitting with representatives of heavyweights such as the aforementioned Apple… and Samsung. They want the South Koreans don’t just make a few piecesbut rather that they invest in artificial intelligence, hardware and in something that India is eagerly seeking: semiconductor research and development. Samsung is one of the world’s leading foundries and is investing millions outside of South Korea. India seeks to be part of that equation.

To do this, they have something called PLI. This is a government initiative that encourages the production of a complete portfolio of products. That is to say: the more complete products a same brand manufactures in the country, the more incentives and economic advantages it receives. They also promise less economic friction with the West, although looking at the issue of tariffs and their ups and downs, it is something that can change from one day to the next.

And it’s not all about pure and simple money: India is the most populous country on the planet and it is estimated that the average level of income will continue to rise over the next five years, which also “promise” a good national market for those products that companies manufacture on their soil.

broken dreams. According to estimates, electronics manufacturing in India was a market of 115,000 million dollars and it is expected triple it by 2027. My colleague Laura already detailed that they were executing the technique of being a steamroller based on releasing billsalthough two things must be said. The first is that one of those objectives, the become the foundry of the worldit’s going to be complicated. TSMC is leading the conversation and is moving both on home soil -Taiwan- and in Europe and, above all, the United States.

And what is truly worrying for the country is that, in this search for talent at all costs, it has invested a lot of money in the construction of technological cities that rival ‘Silicon Valley’, but that they don’t seem to attract the expected attention by foreign companies. The short-term objective is very ambitious and, as we say, they have already been attracting technological talent, but perhaps the easiest thing is to bet on what drives AI.

Microsoft, Google or Amazon, apart from the country’s companies and funds, have declared their intention to invest in gigantic data centers in India, even forming to thousands of citizens. And the situation may gain traction now that it has become clear that the Middle East It’s not the paradise some thought it was.. The question is whether by the time those data center investments are complete, AI will still be the center of the conversation.

Images | Microsoft, BHTPA

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