How the Supreme Court could soon change free speech on the internet
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When Elon Musk announced his offer to buy Twitter for more than $40 billion, he told the public his vision for the social media site was to make sure it’s “an inclusive arena for free speech.”
Musk’s actions since closing the deal last year have illuminated how he sees the balance internet platforms must strike in protecting free expression versus user safety. While he’s lifted restrictions on many previously-suspended accounts including former President Donald Trump’s, he’s also placed new limitations on journalists’ and others’ accounts for posting publicly available flight information he’s equated to doxxing.
The saga of Musk’s Twitter takeover has underscored the complexity of determining what speech is truly protected. That question is particularly difficult when it comes to online platforms, which create policies that impact wide swaths of users from different cultures and legal systems across the world.
This year, the U.S. justice system, including the Supreme Court, will take on cases that will help determine the bounds of free expression on the internet in ways that could force the hand of Musk and other platform owners who determine what messages get distributed widely.
The boundaries they will consider include the extent of platforms’ responsibility to remove terrorist content and prevent their algorithms from promoting it, whether social media sites can take down messaging on the basis of viewpoint and whether the government can impose online safety standards that some civil society groups fear could lead to important resources and messages being stifled to avoid legal liability.
“The question of free speech is always more complicated than it looks,” said David Brody, managing attorney of the Digital Justice Initiative at the Lawyers’ Committee for Civil Rights Under the Law. “There’s a freedom to speak freely. But there’s also the freedom to be free from harassment to be free from discrimination.”
Brody said whenever the parameters of content moderation get tweaked, people need to consider “whose speech gets silenced when that dial gets turned? Whose speech gets silenced because they are too fearful to speak out in the new environment that is created?”
Tech’s liability shield under threat
Facebook’s new rebrand logo Meta is seen on smartpone in front of displayed logo of Facebook, Messenger, Intagram, Whatsapp and Oculus in this illustration picture taken October 28, 2021.
Dado Ruvic | Reuters
Section 230 of the Communications Decency Act has been a bedrock of the tech industry for more than two decades. The law grants a liability shield to internet platforms that protects them from being held responsible for their users’ posts, while also allowing them to decide what stays up or comes down.
But while industry leaders say it’s what has allowed online platforms to flourish and innovate, lawmakers on both sides of the aisle have increasingly pushed to diminish its protections for the multi-billion dollar companies, with many Democrats wanting platforms to remove more hateful content and Republicans wanting to leave up more posts that align with their views.
Section 230 protection makes it easier for platforms to allow users to post their views without the companies themselves fearing they could be held responsible for those messages. It also gives the platforms peace of mind that they won’t be penalized if they want to remove or demote information they deem to be harmful or objectionable in some way.
These are the cases that threaten to undermine Section 230’s force:
- Gonzalez v. Google: This is the Supreme Court case with the potential to alter the most popular business models of the internet that currently allow for a largely free-flowing stream of posts. The case, brought by the family of an American who was killed in a 2015 terrorist attack in Paris, seeks to determine whether Section 230 can shield Google from liability under the Anti-Terrorism Act (ATA) for allegedly aiding and abetting ISIS by promoting videos created by the terrorist organization through its recommendation algorithm. If the court significantly increases the liability risk for platforms using algorithms, the services may choose to abandon them or greatly diminish their use, therefore changing the way content can be found or go viral on the internet. It will be heard by the Supreme Court in February.
- Twitter v. Taamneh: This Supreme Court case doesn’t directly involve Section 230, but its outcome could still impact how platforms choose to moderate information on their services. The case, which will be heard by the Supreme Court in February, also brought under the ATA, deals with the question of whether Twitter should have taken more aggressive moderating action against terrorist content because it moderates posts on its site. Jess Miers, legal advocacy counsel at the tech-backed group for Chamber of Progress, said a ruling against Twitter in the case could create an “existential question” for tech companies by forcing them to rethink whether monitoring for terrorist content at all creates legal knowledge that it exists, which could later be used against them in court.
- Challenges to Florida and Texas social media laws: Another set of cases deals with the question of whether services should be required to host more content of certain kinds. Two tech industry groups, NetChoice and the Computer & Communications Industry Association, filed suit against the states of Florida and Texas over their laws seeking to prevent online platforms from discriminating on their services based on viewpoint. The groups argue that the laws effectively violate the businesses’ First Amendment rights by forcing them to host objectionable messages even if they violate the company’s own terms of service, policies or beliefs. The Supreme Court has yet to decide if or when to hear the cases, though many expect it will take them up at some point.
- Tech challenge to California’s kids online safety law: Separately, NetChoice also filed suit against California for a new law there that aims to make the internet safer for kids, but that the industry group says would unconstitutionally restrict speech. The Age-Appropriate Design Code requires internet platforms that are likely to be accessed by kids to mitigate risks to those users. But in doing so, NetChoice has argued the state imposed an overly vague rule subject to the whims of what the attorney general deems to be appropriate. The group said the law will create “overwhelming pressure to over-moderate content to avoid the law’s penalties for content the State deems harmful,” which will “stifle important resources, particularly for vulnerable youth who rely on the Internet for life-saving information.” This case is still at the district court level.
The tension between the cases
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The variety in these cases involving speech on the internet underscores the complexity of regulating the space.
“On the one hand, in the NetChoice cases, there’s an effort to get platforms to leave stuff up,” said Jennifer Granick, surveillance and cybersecurity counsel at the ACLU Speech, Privacy, and Technology Project. “And then the Taamneh and the Gonzalez case, there’s an effort to get platforms to take more stuff down and to police more thoroughly. You kind of can’t do both.”
If the Supreme Court ultimately decides to hear arguments in the Texas or Florida social media law cases, it could face tricky questions about how to square its decision with the outcome in the Gonzalez case.
For example, if the court decides in the Gonzalez case that platforms can be held liable for hosting some types of user posts or promoting them through their algorithms, “that’s in some tension with the notion that providers are potentially liable for third-party content,” as the Florida and Texas laws suggest, said Samir Jain, vice present of policy at the Center for Democracy and Technology, a nonprofit that has received funding from tech companies including Google and Amazon.
“Because if on the one hand, you say, ‘Well, if you carry terrorist-related content or you carry certain other content, you’re potentially liable for it.’ And they then say, ‘But states can force you to carry that content.’ There’s some tension there between those two kinds of positions,” Jain said. “And so I think the court has to think of the cases holistically in terms of what kind of regime overall it’s going to be creating for online service providers.”
The NetChoice cases against red states Florida and Texas, and the blue state of California, also show how disagreements over how speech should be regulated on the internet are not constrained by ideological lines. The laws threaten to divide the country into states that require more messages to be left up and others that require more posts to be taken down or restricted in reach.
Under such a system, tech companies “would be forced to go to any common denominator that exists,” according to Chris Marchese, counsel a NetChoice.
“I have a feeling though that what really would end up happening is that you could probably boil down half the states into a, ‘we need to remove more content regime,’ and then the other half would more or less go into, ‘we need to leave more content up’ regime,” Marchese said. “Those two regimes really cannot be harmonized. And so I think that to the extent that it’s possible, we could see an internet that does not function the same from state to state.”
Critics of the California law have also warned that in a period when access to resources for LGBTQ youth is already limited (through measures like Florida’s Parental Rights in Education law, also referred to by critics as the Don’t Say Gay law limiting how schools can teach about gender identity or sexual orientation in young grades), the legislation threatens to further cut off vulnerable kids and teens from important information based on the whims of the state’s enforcement.
NetChoice alleged in its lawsuit against the California law that blogs and discussion forums for mental health, sexuality, religion and more could be considered under the scope of the law if likely to be accessed by kids. It also claimed the law would violate platforms’ own First Amendment right to editorial discretion and “impermissibly restricts how publishers may address or promote content that a government censor thinks unsuitable for minors.”
Jim Steyer, CEO of Common Sense Media, which has advocated for the California law and other measures to protect kids online, criticized arguments from tech-backed groups against the legislation. Though he acknowledged critiques from outside groups as well, he warned that it’s important not to let “perfect be the enemy of the good.”
“We’re in the business of trying to get stuff done concretely for kids and families,” Steyer said. “And it’s easy to make intellectual arguments. It’s a lot tougher sometimes to get stuff done.”
How degrading 230 protections could change the internet
A YouTube logo seen at the YouTube Space LA in Playa Del Rey, Los Angeles, California, United States October 21, 2015.
Lucy Nicholson | Reuters
Although the courts could rule in a variety of ways in these cases, any chipping away at Section 230 protections will likely have tangible effects on how internet companies operate.
Google, in its brief filed with the Supreme Court on Jan. 12, warned that denying Section 230 protections to YouTube in the Gonzalez case “could have devastating spillover effects.”
“Websites like Google and Etsy depend on algorithms to sift through mountains of user-created content and display content likely relevant to each user,” Google wrote. It added that if tech platforms were able to be sued without Section 230 protection for how they organize information, “the internet would devolve into a disorganized mess and a litigation minefield.”
Google said such a change would also make the internet less safe and less hospitable to free expression.
“Without Section 230, some websites would be forced to overblock, filtering content that could create any potential legal risk, and might shut down some services altogether,” General Counsel Halimah DeLaine Prado wrote in a blog post summarizing Google’s position. “That would leave consumers with less choice to engage on the internet and less opportunity to work, play, learn, shop, create, and participate in the exchange of ideas online.”
Miers of Chamber of Progress said that even if Google technically wins at the Supreme Court, it’s possible justices try to “split the baby” in establishing a new test of when Section 230 protections should apply, like in the case of algorithms. A result like that would effectively undermine one of the main functions of the law, according to Miers, which is the ability to swiftly end lawsuits against platforms that involve hosting third-party content.
If the court tries to draw such a distinction, Miers said, “now we’re going to get in a situation where every case plaintiffs bringing their cases against internet services are going to always try to frame it as being on the other side of the line that the Supreme Court sets up. And then there’s going to be a lengthy discussion of the courts asking, well does Section 230 even apply in this case? But once we get to that lengthy discussion, the entire procedural benefits of 230 have been mooted at that point.”
Miers added that platforms could also opt to display mostly posts from professional content creators, rather than amateurs, to maintain a level of control over the information they could be at risk for promoting.
The impact on online communities could be especially profound for marginalized groups. Civil society groups who spoke with CNBC doubted that for-profit companies would spend on increasingly complex models to navigate a risky legal field in a more nuanced way.
“It’s much cheaper from a compliance point of view to just censor everything,” said Brody of the Lawyers’ Committee. “I mean, these are for-profit companies, they’re going to look at, what is the most cost-effective way for us to reduce our legal liability? And the answer to that is not going to be investing billions and billions of dollars into trying to improve content moderation systems that are frankly already broken. The answer is going to be, let’s just crank up the dial on the AI that automatically censors stuff so that we have a Disneyland rule. Everything’s happy and nothing bad ever happens. But to do that, you’re going to censor a lot of underrepresented voices in a way that is really going to have outsized censorship impacts on them.”
The Supreme Court of the United States building are seen in Washington D.C., United States on December 28, 2022.
Celal Gunes | Anadolu Agency | Getty Images
The idea that some business models will become simply too risky to operate under a more limited liability shield is not theoretical.
After Congress passed SESTA-FOSTA, which carved out an exception for liability protection in cases of sex trafficking, options to advertise sex work online became more limited due to the liability risk. While some might view that as a positive change, many sex workers have argued it removed a safer option for making money compared to soliciting work in person.
Lawmakers who’ve sought to alter Section 230 seem to think there is a “magical lever” they can pull that will “censor all the bad stuff from the internet and leave up all the good stuff,” according to Evan Greer, director of Fight for the Future, a digital rights advocacy group.
“The reality is that when we subject platforms to liability for user-generated content, no matter how well-intentioned the effort is or no matter how it’s framed, what ends up happening is not that platforms moderate more responsibly or more thoughtfully,” Greer said. “They moderate in whatever way their risk-averse lawyers tell them to, to avoid getting sued.”
Jain of CDT pointed to Craigslist’s decision to take down its personal ads section altogether in the wake of SESTA-FOSTA’s passage “because it was just too difficult to sort of make those fine-grained distinctions” between legal services and illegal sex trafficking.
“So if the court were to say that you could be potentially liable for quote, unquote, recommending third-party content or for your algorithms displaying third-party content, because it’s so difficult to moderate in a totally perfect way, one response might be to take down a lot of speech or to block a lot of speech,” Jain said.
Miers fears that if different states enact their own laws seeking to place limits on Section 230 as Florida and Texas have, companies will end up adhering to the strictest state’s law for the rest of the country. That could result in restrictions on the kind of content most likely to be considered controversial in that state, such as resources for LGBTQ youth when such information isn’t considered age-appropriate, or reproductive care in a state that has abortion restrictions.
Should the Supreme Court end up degrading 230 protections and allowing a fragmented legal system to persist for content moderation, Miers said it could be a spark for Congress to address the new challenges, noting that Section 230 itself came out of two bipartisan lawmakers’ recognition of new legal complexities presented by the existence of the internet.
“Maybe we have to sort of relive that history and realize that oh, well, we’ve made the regulatory environment so convoluted that it’s risky again to host user-generated content,” Miers said. “Yeah, maybe Congress needs to act. ”
WATCH: The big, messy business of content moderation on Facebook, Twitter and YouTube

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AI defense booms in UK and Germany as new wave of billion-dollar startups emerge
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3 hours agoon
December 11, 2025By
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The U.K. and Germany are emerging as key hubs for a new wave of AI defense startups, as Europe scrambles to rearm amid rising geopolitical tensions.
Private funding for defense startups across the region has ramped up in recent years, with investors looking to tap into increasing government military budgets, driven by the ongoing Russia-Ukraine war and pressure from the Trump administration.
But it’s ecosystems in the U.K. and Germany that are seeing the most activity. The majority of the biggest rounds across the sector have been for startups based in those two countries, with both emerging as key launchpads into new markets and battlefield training.
David Ordonez, senior associate at NATO Innovation Fund, told CNBC that this was “thanks to the scientific expertise of their talent base, national commitments to treat this sector as an economic engine for growth and a manufacturing base that enables the rapid scaling of breakthrough innovation.”
‘Visible pathways to procurement’
Venture capital for European defense startups has spiked as members of the NATO military alliance have agreed to increase security spending to 5% of gross domestic product, and defense departments in London and Berlin have increasingly signaled a willingness to adopt new technology built by younger players in the market.
Investors, buoyed by the promise of commercial deals, have funneled a record $4.3 billion into the sector since the start of 2022, according to Dealroom — nearly four times the funds deployed in the previous four years.
Germany’s AI drone makers Helsing and Quantum Systems hit valuations of 12 and 3 billion euros this year, respectively, after rounds worth hundreds of millions of euros. In the U.K., manufacturing platform PhysicsX, which works with defense companies, raised $155 million this year, and missile interception startup Cambridge Aerospace reportedly picked up a $100 million round in August.
The U.K. government’s Strategic Defence Review in June proposed boosting spending on novel tech and streamlining procurement processes, as well as unveiling a £5 billion tech investment package.
“We see a system increasingly open to non-traditional primes, supported by wider investment in skills and technology,” Karl Brew, head of defense at Portuguese-U.K. drone startup Tekever, told CNBC.
Tekever, which became a unicorn this year, announced a major contract to supply uncrewed aerial systems to the Royal Air Force in May. Helsing has several contracts with the U.K. government, and U.S.-based Anduril signed a £30 million contract for its attack drones in March.
Tekever’s AR3 EVO drone undergoing pre-flight checks prior to being launched. Credit: Tekever
Germany announced its defense spending would rise to upwards of 100 billion euros — a record figure since the German reunification — from 2026, and also changed procurement processes to make it easier for startups to participate.
While most European governments have ramped up defense spending, Germany stands out as having “visible pathways from prototype to major procurement [for startups] that many other European markets still do not provide,” Meghan Welch, managing director at financial advisory firm BGL, told CNBC.
Helsing and attack drone startup Stark are both in line to win a contract for kamikaze drones, the Financial Times reported in October. Helsing and Stark declined to comment to CNBC about this.
Legacy infrastructure
Germany’s industrial heritage has also created talent pipelines and infrastructure that startups are tapping into.
“Germany has the industrial base, the infrastructure and the technical talent to produce the next-generation technologies NATO urgently needs,” Philip Lockwood, international managing director of Stark, told CNBC.
Founded in 2024, Stark is building attack and reconnaissance drones and has raised $100 million from investors, including Sequoia Capital, Peter Thiel’s Thiel Capital, and the NATO Innovation Fund.
Stark’s Virtus drone
“Many of Europe’s best engineers developed their expertise in Germany’s industrial and technological sectors, which have long led in hardware, software, manufacturing and supply-chain resilience,” Lockwood said.
The U.K.’s broader ecosystem is also a decisive factor in its appeal as a defense base, said Tekever’s Brew. “It brings together world-class universities and R&D centres with a dense network of aerospace, software and advanced-manufacturing suppliers,” he said.
Launchpads
Another key driver of defense tech in the U.K. and Germany is that both countries serve as launchpads into new markets or frontline training.
The U.K. has had a security and defense partnership with Australia and the U.S. since 2021, known as AUKUS, which has lifted certain export controls and restrictions on technology sharing between the nations.
“As part of AUKUS, the move into the UK was a natural entry point into Europe,” Rich Drake, managing director at Anduril UK, told CNBC.
Alongside signing contracts totalling nearly £30 million for its attack drones earlier this year, Anduril also has plans to open a new manufacturing and R&D facility in the UK.
Anduril UK’s Seabed Sentry. Credit: Anduril UK
“[AUKUS] allows us to work with the MOD [Ministry of Defence], align on operational needs and accelerate the deployment of leading autonomous systems in a context where trust, shared priorities and strategic alignment matter as much as technology,” Drake said.
U.S. defense startups looking to sell into European markets have also often chosen London as a base from which to expand across the region. Second Front Systems and Applied Intuition expanded into the country in 2023 and 2025, respectively.
“Given the history of the special relationship between the US and the UK, the UK serves as an excellent launching pad into the rest of the European market,” said Enrique Oti, chief strategy officer at Second Front Systems.
The U.K. can also serve as a base for European defense startups with global ambitions, added Dmitrii Ponomarev, product manager at VanEck.
“In practice the UK is becoming the interoperability testbed and politically acceptable landing zone for tech flowing in both directions,” Ponomarev told CNBC.
“If you can win a pilot with UK forces, comply with UK/US-aligned security and export regimes and operate in English with UK industrial and legal standards, you look much more ready to US primes, Department of War programs and AUKUS-related efforts.”
In 2025, some of Europe’s best-funded defense startups, including Helsing, Quantum Systems and Stark, announced factories, offices, or investments in the country.
Further east, Germany’s role as one of the largest donors of military aid to Ukraine has given the country’s startups a “front row seat for battlefield feedback,” said Ponomarev.
Quantum Systems has deployed its reconnaissance tech in Ukraine and Helsing announced in February it would produce thousands of strike drones for the country.
Despite the advances, analysts, investors and startup execs all caution there’s more work to be done to create the conditions for building global defense startups in the UK and Germany.
“Scaling remains difficult without continued political and procurement reform,” Ponomarev told CNBC.
“The UK still struggles with slow procurement cycles, clearance bottlenecks and a shortage of security-approved technical talent,” he added. Germany’s biggest obstacles are bureaucracy, strict export controls and heavy dependence on a single customer — the country’s armed forces, Ponomarev added.
BLG’s Welch said the winners of Europe’s AI defense boom “are likely to be companies that can master both the political economy, including export rules, alliances and public narratives, and the technology race, positioning themselves as enablers of national sovereignty rather than disruptors of it.”
Technology
CNBC Daily Open: Much to like in Fed’s meeting amid warnings of restraint
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December 11, 2025By
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Federal Reserve Chair Jerome Powell speaks during a press conference following the Federal Open Markets Committee meeting at the Federal Reserve on Dec. 10, 2025 in Washington, DC.
Chip Somodevilla | Getty Images
It ended up being a “hawkish cut,” as expected. Still, investors managed to find a few gifts tucked between the lumps of coal.
Even though the U.S. Federal Reserve lowered interest rates by a quarter percentage point on Wednesday stateside, two regional bank presidents — Jeffrey Schmid of Kansas City and Austan Goolsbee of Chicago — wanted rates to stand pat.
Their caution was echoed in the Fed’s “dot plot” of rate projection, which showed officials penciling in just one cut in 2026 and another for 2027.
Even the Fed’s rate statement was repurposed from the December 2024 meeting, which ushered in a nine-month period without cuts until September this year.
Why, then, did U.S. markets rise after the meeting?
The biggest surprise was the Fed’s announcement that it would begin purchasing $40 billion in Treasury bills, starting Friday. That move increases the money supply in the economy. In other words, it’s a stealthy way to ease conditions, which helps support financial markets.
Next, Chair Jerome Powell dismissed speculation about future hikes.
“I don’t think that a rate hike … is anybody’s base case at this point,” Powell said. “I’m not hearing that.”
Fed officials also see the U.S economy as remaining resilient. Collectively, they increased their forecast for economic expansion in 2026 to 2.3% from an earlier estimate of 1.8% in September.
“We have an extraordinary economy,” said Powell.
And the markets may be setting up for an extraordinary finish to the year.
“The last interest rate decision of 2025 has essentially paved the way for a Santa Claus rally to end the year, and the S&P 500 is poised to exceed the 7,000 milestone in the next few weeks,” said José Torres, senior economist at Interactive Brokers.
For investors, that would count as a very decent Christmas surprise.
— CNBC’s Jeff Cox contributed to this report.
What you need to know today
And finally…
Anduril flies its unmanned drone YFQ-44A for the first time at an unspecified location in California, U.S., Oct. 31, 2025 in this handout image.
Anduril | Via Reuters
AI defense booms in UK and Germany as new wave of billion-dollar startups emerge
Venture capital for European defense startups has spiked as members of the NATO military alliance have agreed to increase security spending to 5% of gross domestic product. Additionally, defense departments in London and Berlin have increasingly signaled a willingness to adopt new technology built by younger players in the market.
Investors, buoyed by the promise of commercial deals, have funneled a record $4.3 billion into the sector since the start of 2022, according to Dealroom — nearly four times the funds deployed in the previous four years.
— Kai Nicol-Schwarz
Technology
Over $50 billion in under 24 hours: Why Big Tech is doubling down on investing in India
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7 hours agoon
December 11, 2025By
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A slogan related to Artificial Intelligence (AI) is displayed on a screen in Intel pavilion, during the 54th annual meeting of the World Economic Forum in Davos, Switzerland, January 16, 2024.
Denis Balibouse | Reuters
Big Tech is doubling down on investing billions in India, drawn by its abundance of resources for building data centers, a large talent and digital user pool, and market opportunity.
In under 24 hours, Microsoft and Amazon pledged more than $50 billion toward India’s cloud and AI infrastructure, while Intel on Monday announced plans to make chips in the country to capitalize on its growing PC demand and speedy AI adoption.
While India trails the U.S. and China in the race to develop a native AI foundational model, and lacks a large domestic AI infrastructure company, it wants to leverage its expertise in the information technology sector to create and deploy AI applications at enterprise level, also offering Big Tech companies a huge opportunity.
Having a model or computing is not enough for any enterprise to use AI effectively, and it requires companies making application layer and a large talent pool to deploy them, S. Krishnan, secretary at India’s Ministry of Electronics and Information Technology, told CNBC.
Stanford University ranks India among the top four countries along with the U.S., China and the UK in the global and national AI vibrancy ranking. GitHub, a community of developers, has ranked India at the top with the global share of 24% of all projects.
India’s opportunity lies more in “developing applications” which will be used to drive revenues for AI companies, Krishnan said.
On Tuesday, Microsoft announced $17.5 billion in investment in the country, spread over 4 years, aimed at expanding hyperscale infrastructure, embedding AI into national platforms, and advancing workforce readiness.
“This scale of capex gives Microsoft first‑mover advantage in GPU‑rich data centers while making Azure the preferred platform for India’s AI workloads, as well as deepening alignment with the government’s AI public infrastructure push,” said Tarun Pathak, research Director at Counterpoint Research.
Amazon on Wednesday announced plans to invest over $35 billion, on top of the $40 billion it has already invested in the country.
Over the past few months, AI and tech majors such as OpenAI, Google, and Perplexity have offered their tools for free to millions in India, with Google also firming up its plans to invest $15 billion toward building data center capacity for a new AI hub in southern India.
“India combines a huge digital user base, rapidly growing cloud and AI demand, and a high-talent IT ecosystem that can build and consume AI at scale, making it more than just a market for users and instead a core engineering and deployment hub,” Pathak said.
Data center opportunity
India has several advantages when it comes to building data centers. Markets such as Japan, Australia, China and Singapore in the Asia Pacific region have matured. Singapore, one of the oldest data center hubs in the region, has limited room to deploy large-scale data centers due to land availability issues.
India has abundant space for large-scale data center developments. When compared with data center hubs in Europe, power costs in India are relatively low. Coupled with India’s growing renewable energy capacity — critical for power-hungry data centers — and the economics begin to look compelling.
Local demand, fueled by the rise of e-commerce — a major driver of data center growth in recent years — and potential new rules for storing social media data, strengthens the case.
Put simply: India is entering a sweet spot where global cloud providers, AI players, and domestic digitalization all converge to create one of the world’s hottest data center markets.
“India is a pivotal market and one of the fastest‑growing regions for AI spending in Asia Pacific,” said Deepika Giri, associate vice president and head of research, big data & AI, at International Data Corporation.
“A major gap, and therefore a significant opportunity, lies in the shortage of suitable compute infrastructure for running AI models,” she added. Big Tech is looking to capitalize on the infrastructure opportunity in India by investing heavily in the cloud and data center space.
Global companies are expanding capacities closer to service bases in IT cities such as Bangalore, Hyderabad and Pune from traditional centers like Mumbai and Chennai which are closer to landing cables, as they build data centers in India for the world, Krishnan said.
— CNBC’s Dylan Butts, Amitoj Singh contributed to this report.
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