data center
The country’s biggest industrial houses, Tata, Reliance, Adani and Airtel… are now face to face in the same field. This is the field of data centres. To handle the flood of Artificial Intelligence (AI) and cloud computing that is going to come to India in the next decade, these big companies are pouring billions of dollars like water. After all, why are these companies doing this and what effect will it have on a common Indian internet user? Let us understand in detail.
‘Hypervolt’ dragnet
The latest name added to this race is Tata Consultancy Services (TCS). Till now TCS was known for its ‘asset-light’ strategy, but now the game has changed. TCS has taken a big decision by moving away from its old strategy. The company has planned an investment of Rs 18,000 crore (about $ 2.1 billion) in collaboration with private equity firm TPG.
Under this partnership, ‘HyperVault AI Data Center Ltd’ will be built. Its capacity will be 1.2 gigawatt (GW). You can estimate the importance of this figure from the fact that this capacity is equal to the total capacity of all the data centers present in India today. TCS CEO K. According to Keerthivasan, they are creating a passive (infrastructural) framework, in which customers will be able to fit hardware and software as per their needs.
Ambani and Adani’s ‘gigawatt’ gameplan
Reliance and Adani groups are already gearing up to answer this challenge of Tata. Adani Group led by Gautam Adani is very aggressive in the matter of data centers. In October itself, Adani Group announced a partnership with Google for a $15 billion AI data center in Visakhapatnam. Apart from this, their network is already expanding in Mumbai, Chennai, Hyderabad and Pune through investment of $5.9 billion in Maharashtra and ‘AdaniConneX’.
Mukesh Ambani of Reliance Industries is also not lagging behind in this race. After announcing a 1 gigawatt data center in Jamnagar, Reliance has now decided to invest $11 billion to build another 1 gigawatt AI data center in Visakhapatnam. For this, he has joined hands with leading global companies like Brookfield and Digital Realty.
According to a Jefferies report in September, Bharti Airtel, Reliance Industries and AdaniConnex together will account for 3540% of India’s data center capacity by 2030. Airtel’s Nxtra Data currently commands about 15% market share, which it benefits from the company’s strong free cash flow and enterprise customers. The report also said that hyperscalers account for 60% of the data center consumption in India, while the BFSI sector contributes about 17%.
Why is everyone running after data centres?
Now the question arises that why suddenly everyone is running after data centres? The simple answer is your and our data consumption. According to a report by JLL, data consumption in India was only 8 exabytes in FY 2017, which has increased to 229 exabytes by FY 2025 (remember, 1 exabyte = 1 billion gigabytes). We are among the people with the highest number of wireless internet users in the world. With the advent of OTT platforms, UPI payments, e-commerce and now AI (tools like ChatGPT), the appetite for data has increased exponentially.
According to Kotak Mutual Funds, India generates about 20% of the world’s data, but we are able to store only 3% of this data in our country. This is the gap to fill which more than 50 billion dollars (about Rs 4 lakh crore) is going to be invested in the next 5 to 7 years. Jefferies estimates that India’s data center capacity will increase from today’s 1 GW to 8 GW by 2030.
Why is India becoming the world’s choice?
Not only domestic demand, but global factors are also in India’s favor. The cost of building a data center here is much lower than in the world. The cost of building a data center in India is around $7 per watt, which is less as compared to the global level. Also, electricity prices here are about 20% cheaper than in America. The government is also giving full support to this sector. State governments like Tamil Nadu, Uttar Pradesh and Maharashtra are giving exemption in electricity duty and up to 100% waiver in stamp duty. Additionally, India has a strong submarine cable network, turning cities like Mumbai and Chennai into ‘International Airports of Data’.