The Union Cabinet has approved India's comprehensive IndiaAI Mission with an allocation of ₹10,372 crore, under which Uttar Pradesh will develop Lucknow as the country's first dedicated artificial intelligence city. The UP Electronics Corporation Ltd, serving as the nodal agency, has issued an Expression of Interest inviting real estate developers to build and operate the AI city on a 40-acre plot in the Nadarganj Industrial Zone.
The proposed AI city will feature plug-and-play office infrastructure specifically designed for AI startups, incubators, and technology corporations. The development plan includes Class A office towers, a mix of luxury and affordable residential complexes following a walk-to-work model, and dedicated space for premier engineering and management institutes to foster industry-academia collaboration. The city will also incorporate AI-powered internal transportation systems to create a fully integrated tech ecosystem.
To attract developers, the state government has announced substantial financial incentives under the IT and ITeS Policy 2022. These include one-time capital expenditure support of 25 per cent—up to ₹20 crore for IT Parks and ₹100 crore for IT Cities—along with complete stamp duty exemption. The government will provide the 40-acre land parcel free from regulatory restrictions, with support for land acquisition, zoning, and major permissions already secured.
The IndiaAI Mission, approved in March 2024, aims to establish computing capacity of over 10,000 GPUs and develop foundational large language models with more than 100 billion parameters trained on datasets covering major Indian languages. The initiative includes seven key components: compute infrastructure, datasets platform, application development, innovation centres, future skills programs, startup financing, and safe and trusted AI frameworks.
This AI city initiative aligns with Uttar Pradesh's ambitious target of becoming a $1 trillion economy within five years, with IT and ITeS identified as core growth drivers. The state currently ranks as India's sixth-largest IT ecosystem and hosts one of the highest numbers of startups in the country. UP has already distributed over 20 lakh tablets and smartphones to youth under the Swami Vivekananda Youth Empowerment Scheme to enhance digital literacy.
Industry analysts expect the AI city to reduce Lucknow's dependence on established tech hubs like Bengaluru, Hyderabad, and Pune while creating significant employment opportunities for software engineers and AI specialists. The project represents a strategic move to decentralise India's technology infrastructure beyond traditional IT corridors.