By Sai Ishwarbharath B

BENGALURU, Sept 17 (Reuters) - China's Lenovo Group

will start making artificial intelligence $(AI)$ servers at its plant in southern India and opened an AI servers-focussed R&D lab in the tech hub of Bengaluru, the electronics hardware maker said on Tuesday.

Lenovo said it aims to make 50,000 AI rack servers and 2,400 graphic processing unit (GPU) servers, which are designed specifically for resource-heavy tasks like machine learning, annually at the plant in Puducherry.

"The servers are not only for local consumption but also for exports," Amar Babu, president of Asia Pacific at Lenovo, told Reuters.

He declined to disclose any investment or hiring targets for the R&D lab or the Puducherry plant, at which Lenovo already makes laptops, notebooks and personal computers (PCs).

The demand for GPUs or AI chips has skyrocketed since the generative AI wave that kicked off in late 2023, boosting the fortunes of the likes of Nvidia and AMD .

AI hardware is expected to corner 12% of the global AI market, which is to nearly triple to $380 billion in 2027, according to a Nasscom-BCG report released earlier this year.

Lenovo, which gets about 47% of its revenue from its non-PC businesses, follows the likes of Apple , Foxconn

and Dell in increasing manufacturing capacity in India, in part to lower their dependence on China.

India too has been luring companies, including tech-focussed ones, by providing manufacturing-linked incentives.

While the AI-server manufacturing plan is not linked to any government incentive scheme, its partnership with India's Dixon Technologies to make PCs and Motorola phones does take advantage such schemes, said Babu.

(Reporting by Sai Ishwarbharath B; Editing by Savio D'Souza)

((saiishwarbharath.b@thomsonreuters.com;))