Lenovo recently announced that it had commenced production of large, high-performance computers in Pondicherry, a region in southeastern India, expanding beyond its current lineup of laptops and smartphones.

Lenovo Group Ltd. has initiated the manufacturing of AI servers in southern India, which has contributed to the country’s rapid development as a technology hub.

The Chinese corporation will also enhance its facilities in the Bangalore area, including a research centre dedicated to artificial intelligence. Lenovo’s intentions represent another success for India as Prime Minister Narendra Modi aims to attract more technology investments.

Despite recent strains in India’s relationship with China, global technology firms view it as an appealing location for expanding operations amidst the trade tensions between Beijing and Washington.

The servers handle the computations required to support services, including generative AI, which gained popularity through applications like ChatGPT. The addition of AI servers means that Lenovo will offer its entire range of hardware products in India for domestic and international markets, emphasising its significance to the company.

Although India’s technology manufacturing sector is still relatively small compared to China, it has been making progress and now produces increasingly advanced products such as iPhones.

The introduction of AI servers represents a significant achievement, demonstrating that India can provide an alternative to regions with more established high-end manufacturing industries.

Currently, the majority of the world’s AI servers are manufactured in Taiwan, where technology giants like Amazon.com Inc., Microsoft Corp., and Nvidia Corp. produce their servers. However, due to increasing geopolitical tensions between China and the West, companies are pressured to shift their manufacturing operations away from Taiwan.

The demand for generative AI tools and applications has led to a surge in the need for related hardware. Last year, electronics manufacturer Foxconn Technology Group projected that annual sales of AI servers could reach USD 150 billion by 2027.

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