Karnataka will establish an Artificial Intelligence (AI) Centre of Excellence (CoE) at the International Institute of Information Technology (IIIT) campus in Raichur at an estimated cost of Rs 12 crore to support industrial growth and strengthen the state’s technology ecosystem, Large and Medium Industries Minister M B Patil said.

Speaking at the conference ‘AI for Manufacturing: Building a Future-Ready Karnataka’, organized by the Indian chapter of the American Chamber of Commerce, Patil urged US companies to expand their manufacturing operations in Karnataka and participate in the Global Investors’ Meet scheduled to be held in Bengaluru in April next year.

The state government will also introduce a new data centre policy shortly. Under the proposed policy, data centres with a combined capacity of 1 GW will be developed across North Bengaluru, Mangaluru and Tier-2 locations, according to a release from the minister’s office.

Patil said India’s first AI City would be established at KWIN City, the Knowledge, Wellbeing and Innovation City currently under development. He said Karnataka already has more than 20,000 chip designers, highlighting the state’s growing capabilities in advanced technology and electronics.

Under the Nipuna Karnataka programme, more than 100 educational institutions are being adopted by industries to strengthen industry-academia collaboration. More than 30 Industrial Training Institutes are also being developed as Centres of Excellence with World Bank assistance. The higher education sector is being modernized with Rs 2,500 crore in assistance from the Asian Development Bank.

Global companies including Boeing, GE Aerospace, Honeywell, Applied Materials and Timken have established significant operations in Karnataka. Their activities span next-generation propulsion technologies, AI-based engine diagnostics, industrial Internet of Things, precision engineering and the semiconductor supply chain.

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Patil said Karnataka’s strengths in aerospace and defence manufacturing, biotechnology, machine tools and electronic design have helped the state remain ahead of the national average in per-capita industrial output.

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He added that adopting advanced AI technologies could further strengthen these sectors. AI could increase workforce productivity by 53 per cent, adding that Karnataka would seek to make effective use of this potential.