Mukesh Ambani’s AI plan
Mukesh Ambani, Chairman of Reliance Industries Limited, is now preparing to make a big big areas Artificial Intelligence and FMCG. Reliance is planning to bring Jio Infocomm a separate IPO next year, and with this, Ambani is playing such a big game in these two new sectors that the current businesses also look small. The question is whether Ambani will be able to create new business of two billion-dollars like AI and FMCG together, that too keeping the pace of the rest of the business?
Reliance Consumer Products Limited, FMCG company of Reliance, is running a target of Rs 1 lakh crore in the next 5 years. Right now this company is earning Rs 11,500 crore annually, but its plan is to increase it by 9 times that it becomes India’s largest FMCG company.
Campa Cola has competed with companies like Coke and Pepsi in many states and has won double-design market share. The Independence brand, which makes everyday things, has already crossed a revenue of Rs 1,000 crore. It is now reaching Middle East, Sri Lanka, Nepal and West Africa outside India. In the next 12 months, it is preparing to sell its products in 25 countries. RCPL has now reached more than 1 million shops, mostly small stores. The company will build mega food parks by spending $ 4.7 billion in the next 3 years, which will increase production on a large scale. Experts like Goldman Sachs and MK Global say that a new value will be created for RCPL Reliance, which can be as big and profitable as retail business.
Reliance’s big bet in AI
Reliance is now on the way to become India’s most ambitious AI company through Reliance Intelligence, for this the company has joined hands with two veterans. A 70:30 joint venture with Meta, which will invest an initial $ 100 million. This deal can be completed by December 2025. A high-tech AI-focused cloud zone is being built in Jamnagar, Gujarat by partnership with Google Cloud.
This AI project will create India’s largest AI talent pool and world-class AI infrastructure. The facility of Jamnagar will take power from Reliance’s New Energy Business and Jio’s fiber connectivity will connect cities like Mumbai-Delhi.
How much power is needed?
- 6,78,000 B100 Chips will be required for 1 GW Datasterator.
- If Reliance uses 200 MW, it needs 1,35,000 chips.
- In 4-5 years, 1.3 GW of electricity will be required for the full capacity of 1 GW.
Morgan Stanley says that Reliance has the full power to become India’s most aggressive AI company. Bofa Securities believes that in the next 2-3 years this AI strategy can attract big investors, as it was in Jio and Retail before.
What does the market say?
Analysts believe that Reliance shares are still at an attractive price. CLSA has given a target price of Rs 1,650 and said that Jio’s tariff increase, retail growth and Jio’s IPO can boost the stock in the next 12-15 months. Bofa has kept a target of ₹ 1,660 and advised to buy it, although there are challenges.