The five-year investment is for a one-gigawatt AI data centre in Visakhapatnam in the state of Andhra Pradesh.

Google said last month it will spend $15 billion over the same period on a giant data centre and AI base in the same city, its biggest outside the United States.

The Digital Connexion joint venture is between retail-to-refining giant Reliance, Canadian multinational Brookefield and US real estate investment firm Digital Realty.

The investment will drive "jobs, innovation and global tech investment", Andhra Pradesh Chief Minister N. Chandrababu Naidu said in a post on social media platform X.

"This landmark project underscores Andhra Pradesh's emergence as a leading destination for advanced digital infrastructure and next-generation computing capabilities," the state government said in a statement.

Demand for AI tools and solutions is surging in India, which is projected to have more than 900 million internet users by year's end.

Data centres are also an area of phenomenal global growth, fuelled by the need to store massive amounts of digital data and to train and run energy-intensive AI tools.

Leading US AI firms seeking to court users in the world's fifth-largest economy have made a flurry of announcements recently about expanding into India.

US startup Anthropic said in October it plans to open an office in India next year, with its chief executive Dario Amodei meeting Indian Prime Minister Narendra Modi.

OpenAI has said it will open an Indian office this year, with its chief Sam Altman noting that ChatGPT usage in the country had grown fourfold over the past year.

AI firm Perplexity also announced a major partnership in July with Indian telecom giant Airtel, offering the company's 360 million customers a free one-year Perplexity Pro subscription.