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Tata Consultancy Services Ltd. is setting up a wholly owned subsidiary to build “world-class AI infrastructure”, starting with a 1 GW AI data centre in India at an investment of $6.5 billion. That matches India’s total installed data-centre capacity at present.
“We have set a target of 1 GW. We will be doing it in phases,” Krithi Krithivasan, chief executive officer at India’s IT bellwether said during an investor call after the company announced its September quarter earnings. “We expect to do 1 GW in 5-7 years.”
According to TCS, every 150 MW of AI compute power will require an investment of $1 billion, which totals to $6.5 billion for 1 GW. The investment will be funded through equity and debt by bringing on board financial investors. Clients for the AI data centre would include pure-play AI startups, deeptech companies, hyperscalers, and to “a great extent” government entities. The facility would largely function as a passive data centre—a standby of sorts for when an active data centre falters.
Revenue from TCS’ AI data centre would start accruing in 18-24 months, CFO Samir Sekhsaria said. The entire data and AI compute power will be hosted in India. The company didn’t specify the location for the facility.
TCS AI Plans
The move is significant for TCS, as it signals a break from cost-effective outsourcing to the capital-intensive business of AI compute power. That will allow the Tata Group company to offer end-to-end enterprise AI solutions—from training large language models and running generative AI workloads to hosting secure, India-based AI clouds for global clients.
“This will give us coverage across the entire AI stack—from infra layers to apps,” TCS’ Chief Operating Officer Aarthi Subramanian said in the analyst call.
TCS’ AI plans align with a broader Tata Group strategy to build a vertically integrated digital ecosystem—from infrastructure and software to consumer-facing AI. To that end, the company is integrating all its AI teams and capabilities to create a new AI and Services Transformation unit led by TCS veteran Amit Kapur. He will report to COO Subramanian.
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Data centres in India
To be sure, TCS’ planned 1 GW AI data centre matches the current installed capacity in India, indicating that the industry is still in its infancy in a country that is home to the biggest internet population outside of China.
India’s data-centre market is currently valued at $4-8 billion and is expected to grow at a compound annual growth rate of 15-20% until the end of the decade.
According to JLL, India’s installed data-centre capacity crossed the 1-GW mark in 2024, up from about 350 MW in 2019. ICRA Ltd. expects it to double to around 2.5 GW by 2027-28. requiring an investment of nearly ₹90,000 crore (about $10 billion). Colliers projects an even sharper growth to 3.5-4.5 GW by 2030, at a total investment of $25-30 billion.
“Currently, India has about 1.2 GW capacity, and demand is expected to grow tenfold in the next five to six years,” TCS CEO Krithivasan said.
On Thursday, TCS shares rose 1.09% to ₹3,060.20 apiece on the NSE even as benchmark Nifty 50 ended the day 0.54% higher at 25,181.80 points.
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