Lenovo Group is set to begin manufacturing artificial intelligence (AI) servers at its plant in southern India and has opened a new AI-focused R&D lab in Bengaluru, Reuters news agency reported, citing the company’s statement.
The facility in Puducherry will produce 50,000 AI rack servers and 2,400 graphic processing unit servers annually, designed for tasks like machine learning, the report says.
Amar Babu, Lenovo’s Asia Pacific president, told Reuters that the servers are intended for both local use and export, although no details were shared about investment or hiring targets for the lab or plant, which also produces laptops and personal computers.
According to the report, the demand for AI hardware, particularly GPUs, has surged since the rise of generative AI in late 2023. A Nasscom-BCG report projects AI hardware to account for 12% of the global AI market, expected to triple to $380 billion by 2027.
AI hardware is expected to corner 12% of the global AI market, which is to nearly triple to $380 billion in 2027, according to a Nasscom-BCG report released earlier this year.
Lenovo, which gets about 47% of its revenue from its non-PC businesses, joins companies like Apple, Foxconn, and Dell in expanding manufacturing in India, partly to reduce reliance on China.
India has been attracting companies, particularly in the tech sector, by offering manufacturing-related incentives. Although the AI-server manufacturing initiative is not tied to any government incentive program, Lenovo’s partnership with India’s Dixon Technologies to produce PCs and Motorola phones does benefit from such schemes, according to Amar Babu.
