Lenovo Expands AI Server Manufacturing in India, Opens New AI-Centric Lab

Source: Reuters

By Priya Khosla September 19, 2024

China's Lenovo Group is making significant strides in the artificial intelligence (AI) sector by announcing plans to manufacture AI servers at its southern India plant in Puducherry. The company will produce 50,000 AI rack servers and 2,400 graphic processing unit (GPU) servers annually, designed to handle resource-intensive tasks like machine learning. This move, which caters to both local consumption and export markets, is part of Lenovo's broader strategy to diversify production away from China. The demand for AI chips and GPUs has surged since the rise of generative AI in late 2023, positioning companies like Lenovo to capitalize on this rapidly expanding market.

In addition to the manufacturing push, Lenovo has opened an AI-centric research and development lab in Bengaluru, India's tech hub. This lab is expected to focus on advancing AI server technologies, although Lenovo has not disclosed specific investment or hiring targets. The company’s decision aligns with the growing demand for AI hardware, which is projected to capture 12% of the global AI market, estimated to reach $380 billion by 2027, according to a Nasscom-BCG report.

Lenovo's move to expand its AI capabilities in India follows the trend of tech giants like Apple, Foxconn, and Dell, all of which have ramped up production in the country to reduce dependence on Chinese manufacturing. Although Lenovo's AI server manufacturing is not tied to Indian government incentives, its collaboration with Dixon Technologies for producing PCs and Motorola phones does benefit from such schemes. As India continues to attract tech companies with its manufacturing-linked incentives, Lenovo's efforts represent a significant step in the country's growing AI and tech manufacturing landscape.