The great compute buildout: Can data centres power India’s AI leap?

Summary

Global tech giants are pouring billions into AI-ready data centres across India. Can the infrastructure boom help the country, with its vast user base and engineering talent, become a creator of AI rather than just a hosting destination?

When OpenAI launched ChatGPT in November 2022, the artificial intelligence (AI) model took the world by storm. Since then a slew of other companies have launched their own AI models, including Anthropic with Claude, Google with Gemini, and xAI with Grok. And that has led users to lean on AI to search, learn and work.

Indians have been at the forefront in adopting AI. ChatGPT alone has more than 100 million users in India, or around 10% of its global user base. Indeed, government thinktank Niti Aayog estimates that AI adoption could unlock approximately $1 trillion in economic value for India by 2035.

But while Indians are among the world’s biggest AI users, much of the computing infrastructure powering this digital activity sits outside the country. India is among the world’s largest consumers of digital services, but a relatively small host of the computing power that sustains them. Specifically, the country generates nearly 20% of the world’s data but accounts for just 3% of global data-centre capacity, according to Boston Consulting Group (BCG).

That is beginning to change gradually. From Visakhapatnam to Mumbai, Hyderabad and Chennai, a construction boom is gathering momentum. More than $100 billion in investments have been committed across hyperscalers, data-centre operators and Indian conglomerates.

In August, Microsoft commissioned a data centre the size of two Eden Garden cricket stadiums in Hyderabad. Around 600 km away in Visakhapatnam, Google is building its AI hub. Another hyperscaler, Amazon Web Services (AWS), is expanding its data centre capacity across Mumbai and Hyderabad.

Playing catchup

Who’s doing what

Equinix has invested more than $365 million in India and operates five facilities across Mumbai and Chennai.

Shelley Singh