Lenovo Group Ltd. has commenced building AI servers in southern India, a new boon for the fast-growing country that is aiming to become a high-tech hotbed. The company said it has started making large, powerful computers in Pondicherry in southeast India, expanding beyond products such as laptops and smartphones. The Chinese company will also expand its facilities in the Bangalore area, including a research lab focused on artificial intelligence.

Lenovo’s plans mark another win for India as Prime Minister Narendra Modi seeks to attract more technology investment to the country. Although strained relations between India and China have suffered setbacks in recent years, global tech companies see it as an attractive option to expand their businesses while Beijing and Washington are locked in a trade war.

The servers execute the necessary computations to support services, including generative AI, which gained prominence through applications like ChatGPT. The introduction of AI servers indicates that Lenovo will produce its complete range of hardware in India, catering to both domestic and export markets, thereby highlighting the significance of the country for the company.

Although India's technology manufacturing sector remains relatively small in comparison to China, it has been progressing and is now capable of producing more advanced products, such as iPhones. The emergence of AI servers marks another significant achievement, demonstrating that India can provide a viable alternative to areas with more developed high-end manufacturing capabilities.