Alphabet Inc's Google will invest $10 billion to set up a massive data centre and artificial intelligence hub in Andhra Pradesh, officials from the southern Indian state said, marking its biggest such investment in the South Asian nation.

Google will build a 1-gigawatt data centre campus in the port city of Visakhapatnam, combining AI infrastructure, large-scale energy sources, and an expanded fibre-optic network, according to a statement from the state government.

A formal agreement is expected to be signed on Tuesday.

The move comes amid intensifying competition among big tech companies, which are spending heavily on building new data centre infrastructure to meet booming demand for AI services.

"In an era where data is the new oil, such initiatives will serve as a strategic advantage," state IT minister Nara Lokesh said.