Mukesh Ambani’s AI plan
Billionaire Mukesh Ambani is planning the boldest turnaround of Reliance Industries yet. He is also investing $15 billion in AI and Dalal Street believes the market could value this AI at $30 billion, which is double the capital invested and will transform what was once an oil-gas-to-telecom giant into a deep-tech powerhouse rivaling global hyperscalers.
The change accelerated last week when Reliance formed Reliance Enterprise Intelligence Limited (REIL), a joint venture in which Reliance Intelligence holds a 70% stake and Meta holds a 30% stake. Both partners have committed to make an initial investment of Rs 855 crore together for the development, marketing and distribution of enterprise AI services. This is the clearest signal yet that Ambani’s AI ambitions have moved beyond boardroom presentations to balance sheet reality.
Morgan Stanley analysts now estimate that Reliance will spend $12-15 billion on AI infrastructure to build a 1 gigawatt datacentre, in which only about 25% of the capacity will be invested. Mayank Maheshwari of Morgan Stanley said that based on the recent token prices of LLM providers, we estimate an ROCE of approximately 11% on these initial investments. He further said that the company hopes that the remaining capacity can be leased to hyperscalers and large language model providers as datacenter as a service. Morgan Stanley said that at a doubling of invested capital to $15 billion by 2027, that would mean a $30 billion valuation for the AI vertical alone.
From Estimates to Infrastructure
This strategy works in two directions. Reliance will use its initial 100 MW of General AI datacenter capacity to meet enterprise demand through its joint venture with Meta on small language models, along with partnerships with Google and Azure. Morgan Stanley estimates the “datacenter as a service” model would generate annual revenues of around $1.5-1.6 million per megawatt, but the real scale would involve Reliance shouldering more than 20 gigawatts of internal power demand to support 100 gigawatts of solar panel capacity and 30-40 gigawatt-hours of battery capacity. Due to which the intense energy hunger of datacenters will be transformed into a private market for Reliance’s clean energy sector.
Reliance’s dual game
The corporate structure reflects Ambani’s bold dual approach to AI dominance, simultaneously partnering and competing with the biggest names in Silicon Valley. In Reliance’s recent second quarter earnings call, Anshuman Thakur, Strategy Head, Reliance Jio Infocomm, made a clean distinction between the telecom branch and the AI enterprise. Thakur said that Reliance Intelligence should be seen as AI companies which are coming up with products and solutions. At this time, Reliance Intelligence is not focusing on creating its own LLM, but on creating products and solutions, AI-based products and solutions companies. He further said that Jio is a user of those capabilities which are going to be developed. Jio will also work with Meta and OpenAI, Google and Microsoft to use their products and services.
question on valuation
Whether the market assigns a $30 billion valuation to Reliance’s AI vertical will depend on execution, competitive positioning and investor interest in infrastructure in the rapidly growing AI landscape. Morgan Stanley’s 2x price-to-book estimate mirrors the valuations of Asian peer GDS, while US-based Corview and Equinix are trading at even higher multiples. The stakes are basically that Reliance will leverage its capital access, energy infrastructure and telecom distribution to become a leader in India’s AI Can capture a significant share in infrastructure construction and the market will value this franchise at hyperscaler multiples rather than traditional infrastructure returns.