China’s Lenovo Group announced plans to begin manufacturing artificial intelligence (AI) servers at its facility in southern India, while also launching a new AI-focused research and development (R&D) lab in Bengaluru, India’s tech hub. The company aims to produce 50,000 AI rack servers and 2,400 GPU servers annually at its Puducherry plant, designed to handle resource-intensive tasks like machine learning.
“The servers are not only for local consumption but also for exports,” Amar Babu, president of Asia Pacific at Lenovo, told Reuters. While Babu did not disclose specific investment or hiring details for the new lab or the Puducherry plant, the facility already produces laptops, notebooks, and personal computers.
The company stated, “Today’s announcement marks the next phase in Lenovo’s multi-million-dollar investment plan… further solidifying Lenovo’s commitment to India by creating thousands of economic opportunities in the high-technology skills domain.”
The demand for GPUs and AI chips has surged since the generative AI boom in late 2023, benefiting companies like Nvidia and AMD. AI hardware is expected to capture 12% of the global AI market, which is projected to nearly triple to $380 billion by 2027, according to a Nasscom-BCG report.
Lenovo, which generates 47% of its revenue from non-PC sectors, joins companies like Apple, Foxconn, and Dell in ramping up manufacturing in India to reduce reliance on China. India, offering manufacturing-linked incentives, has attracted tech companies to expand locally.
Although Lenovo’s AI server production plan isn’t tied to any government incentives, its collaboration with India’s Dixon Technologies for PC and Motorola phone production does leverage such programs, according to Amar Babu, Lenovo’s Asia Pacific President.
“With today’s announcement of AI server manufacturing in India, we complete Lenovo’s pocket-to-cloud technologies ‘Made in India’ for the world,” Shailendra Katyal, Managing Director, Lenovo India, said.
