Lenovo Group Ltd. has begun manufacturing AI servers in Pondicherry, southern India, marking a significant milestone in the country’s journey to becoming a high-tech powerhouse.

On Tuesday, the Chinese tech giant announced its latest venture into large-scale computing systems, stepping beyond its traditional product lines like laptops and smartphones.

This move complements Lenovo’s expanding presence in India, including plans to build research and development (R&D) facilities in Bengaluru, with a focus on artificial intelligence (AI) technologies. 

India’s success in attracting Lenovo’s investment is another win for Prime Minister Narendra Modi’s campaign to position the country as a global technology hub.

The government has been working hard to capitalize on opportunities arising from geopolitical tensions between China and the United States, which have caused disruptions in trade and technology sectors. As global companies look for alternatives to China for high-end manufacturing, India presents itself as an attractive option with its growing expertise in technology and manufacturing. 

 

The AI servers built by Lenovo will handle complex computations required to power generative AI applications like ChatGPT, underscoring the company’s commitment to developing a full stock of hardware in India.

 

These servers will serve both domestic and international markets, signaling India’s growing importance in Lenovo’s global operations. While India’s tech manufacturing sector still lags behind giants like China, it is rapidly gaining ground. Apple, for instance, has been manufacturing iPhones in India, and now Lenovo’s AI server production marks another leap forward for the country.

AI server production represents a key area of growth, as demand for generative AI tools and applications surges worldwide. Technology giants such as Amazon, Microsoft, and Nvidia rely heavily on AI servers, with the bulk of global production currently concentrated in Taiwan. However, geopolitical tensions and supply chain risks are pushing companies to diversify their manufacturing locations. 

Foxconn Technology Group has already predicted that annual sales of AI servers could reach $150 billion by 2027 highlighting the growing demand for this technology. Lenovo’s decision to expand its AI server production in India is a clear sign that the country is emerging as a serious player in the high-end tech manufacturing landscape.