The city of Mangaluru has been identified as a highly viable and cost-effective location for establishing a major data centre cluster, a finding poised to reshape India's digital infrastructure map and significantly benefit the burgeoning Artificial Intelligence industry. A comprehensive feasibility study, titled *Mangaluru: India's Next Potential Data Centre Hub – A Feasibility Study*, conducted by the Karnataka Digital Economy Mission (KDEM), the Silicon Beach Programme (SBP), and Deloitte, outlines a strategic roadmap to develop a one-gigawatt (1 GW) coastal data centre cluster over the next decade.[1][2] This ambitious plan positions Mangaluru not as a replacement, but as a crucial support hub to the hyperscale capacity of Bengaluru, operating under a high-impact, state-wide hub-and-spoke architecture that enhances energy efficiency, optimizes latency, and bolsters digital resilience across Karnataka.[2][3][4]

The core argument for Mangaluru lies in its pronounced cost advantages and reliable infrastructure compared to traditional Tier-1 coastal hubs like Mumbai and Chennai. The study details that land leasing costs in Mangaluru are substantially lower, at approximately ₹7.69 per square foot per month, which offers a cost advantage that is up to four to five times cheaper than in Mumbai.[1][5] Power, a major operational expenditure for data centres, is also competitively priced, with tariffs ranging between ₹5.95 and ₹6.60 per kilowatt-hour (kWh), making large-scale operations more affordable for developers and significantly shortening the investment recovery timeline.[1] Beyond sheer cost, the city's infrastructure boasts an impressive power reliability of 98.56%, coupled with assured water availability, which are non-negotiable prerequisites for mission-critical data centre operations.[1][5][6] Furthermore, the coastal climate itself contributes an advantage, potentially offering a 10 to 15 percent saving on cooling costs, a vital factor for the power-hungry, high-density computing workloads characteristic of modern AI infrastructure.[7][5]

The strategic significance of Mangaluru extends beyond local economics, tapping into its natural advantage as a coastal city on the Arabian Sea. The report highlights the city’s potential for establishing a new submarine cable landing station, which would provide high-bandwidth, low-latency international connectivity—a key enabler for global cloud platforms and AI model training that rely on massive data transfers.[2][3][8] By creating a "cable-to-cloud-to-chip" corridor, Karnataka aims to anchor the next wave of data centre expansion in India, a market projected to reach a valuation of $21.8 billion by 2030.[5][4][8] This coastal advantage, combined with the plan to power the 1 GW cluster with a green energy backbone, positions Mangaluru as a destination for sustainable, resilient, and globally competitive digital infrastructure.[2][3] The shift towards distributed digital infrastructure is also a response to the rapidly accelerating demand driven by factors such as robust growth in mobile usage, digital services, financial technology, and, crucially, the large-scale adoption of AI.[1]

The rise of Mangaluru as a data centre hub is intrinsically linked to the explosive growth in high-performance computing required for the AI revolution. Global trends show an increasing need for distributed, low-latency computing to process data closer to the source for applications like real-time analytics, autonomous systems, and generative AI inference.[2][3][4] The proposed hub-and-spoke model, with Mangaluru acting as a key regional spoke alongside other emerging cities like Mysuru and Hubballi-Dharwad, is specifically designed to support these AI-ready capacities and edge infrastructure requirements, moving computing power beyond the saturation of Bengaluru.[3][5][4] Investors are already responding to this potential; for example, Datasamudra, the data centre arm of Teleindia Datacenter, is reportedly planning to develop a 35 to 40-megawatt (MW) AI-focused data centre in Mangaluru, with additional smaller edge facilities planned for other Karnataka cities.[7][5] This private sector interest is a strong validation of the report’s findings and the state’s strategy to facilitate investments through progressive digital economy policies, including land subsidies and green energy incentives.[9]

Furthermore, the region is already demonstrating momentum with a growing ecosystem of talent and Global Capability Centers (GCCs). The study identifies Mangaluru as ranking among India’s top eight emerging GCC hotspots, with $240 million worth of GCC acquisitions and a rise in smaller enterprise centres within sectors like BFSI (Banking, Financial Services, and Insurance), RegTech, and FinTech.[1] This burgeoning digital talent base and strengthening corporate presence ensure a ready supply of skilled workers for the high-value digital jobs that the 1 GW data centre cluster is expected to generate.[3][4] The long-term demand for regional data processing capacity is strengthened by the rising adoption of enterprise cloud services and AI-driven capabilities across the coastal corridor.[2] The feasibility study concludes that with focused policy action, coordinated execution across power, land, and connectivity, and targeted anchor investments, Mangaluru can successfully transition from an emerging story to India's next major opportunity in coastal data infrastructure, playing a pivotal role in advancing the state’s "Beyond Bengaluru" mission and cementing Karnataka’s position in the global digital economy.[2][3][4]