Indian IT giant Tata Consultancy Services has secured one billion dollars from private equity firm TPG. This investment is part of a multi-year, two billion dollar project to build a network of gigawatt-scale data centers in the country.
The project, named HyperVault, addresses the rising demand for AI compute, which is increasing faster than companies can construct the necessary power-hungry infrastructure. The demand-supply gap for AI compute in India is particularly stark. The country generates nearly twenty percent of the world’s data but accounts for only about three percent of global data center capacity.
Big tech companies and cloud providers have been investing billions of dollars to expand local capacity and tap the country’s growing adoption of AI products. With HyperVault, TCS and TPG plan to develop liquid-cooled, high-density data centers. These facilities will have the power and network capacity required to support advanced AI workloads across major cloud regions.
Liquid cooling and high-density rack designs are becoming more common. The GPUs needed to power AI inference and training use significantly more power and generate more heat than conventional CPU servers. However, such designs also raise questions about resource use in countries like India, where water scarcity is already a concern.
In urban hubs such as Mumbai, Bengaluru, and Chennai, where much of India’s data-center capacity is concentrated, existing water stress could complicate operations. Estimates note that a one-megawatt data center load can require up to twenty-five point five million liters of water a year for cooling, adding pressure to already strained infrastructure.
The rapid building of AI data centers stands to further stress India’s power and land use, two other bottlenecks identified by industry analysts. High-density AI clusters require a reliable electricity supply and large parcels of industrial land. These requirements are increasingly difficult to secure in major urban regions.
Nonetheless, global tech companies are treating India as their frontier for building AI infrastructure. According to reports, local and global technology firms have announced investments of more than thirty-two billion dollars over the last two years to expand data center infrastructure in the country.
In January, Microsoft said it would invest three billion dollars over two years in India’s cloud and AI infrastructure. In October, Google said it would spend fifteen billion dollars over five years to build a gigawatt-scale AI data center hub in the southern state of Andhra Pradesh. Earlier, Amazon committed twelve point seven billion dollars to build AWS cloud infrastructure in India through 2030.
TCS said it would work with hyperscalers and AI companies to design, deploy, and operate AI infrastructure as the platform expands. The company plans to build around one point two gigawatts of capacity in its initial phase.
Estimates suggest that more than ninety-five percent of India’s new data-center capacity over the next five years will come from leased facilities. The remainder will be driven by hyperscalers building dedicated AI infrastructure. Local players are also expanding their data-center capacity to meet rising demand.
TCS and TPG project that India’s total data-center capacity could exceed ten gigawatts by 2030, a significant increase from roughly one point five gigawatts today.