Tata Consultancy Services (TCS) has secured a $1 billion investment from private equity firm TPG, forming part of a multi-year, $2 billion initiative to develop a network of gigawatt-scale data centers across India. This joint project, named \"HyperVault,\" aims to bolster the country's infrastructure for artificial intelligence (AI) compute workloads.
The investment addresses a growing demand for AI compute capacity that currently outpaces infrastructure development, particularly within India. According to Deloitte, India generates nearly 20% of the world's data but accounts for only about 3% of global data center capacity. This disparity has prompted significant investments from major technology companies and cloud providers seeking to expand local capabilities.
Under the \"HyperVault\" initiative, TCS and TPG plan to construct liquid-cooled, high-density data centers. These facilities are designed to provide the necessary power and network infrastructure for advanced AI training and inference across key cloud regions in India, as stated by the participating companies. TCS intends to build approximately 1.2 gigawatts of capacity in its initial phase and will collaborate with hyperscalers and AI firms on infrastructure design, deployment, and operation.
The development of high-density, liquid-cooled data centers introduces resource utilization considerations, especially in regions like India where water scarcity is an existing concern. S&P Global, referencing Uptime Institute estimates, indicated that a 1 MW data center load can require up to 25.5 million liters of water annually for cooling. This demand could further strain infrastructure in urban centers such as Mumbai, Bengaluru, and Chennai, where much of India's data center capacity is concentrated. Industry analysts have also identified reliable electricity supply and large parcels of industrial land as potential bottlenecks for rapid AI data center expansion.
Despite these challenges, global technology firms continue to invest substantially in India's AI infrastructure. S&P Global reports that local and international technology companies have announced over $32 billion in data center infrastructure investments in India during the last two years. Notable commitments include Microsoft's pledge of $3 billion over two years for cloud and AI infrastructure, Google's plan to invest $15 billion over five years for an AI data center hub, and Amazon Web Services' (AWS) commitment of $12.7 billion for cloud infrastructure through 2030.
TCS and TPG project India's total data center capacity could exceed 10 gigawatts by 2030, a significant increase from an estimated 1.5 gigawatts today. S&P Global estimates that more than 95% of India's new data center capacity over the next five years will originate from leased facilities, with the remaining driven by hyperscalers establishing dedicated AI infrastructure.
