India’s TCS has acquired TPG to fund half of a $2 billion AI data center project

Indian IT giant Tata Consultancy Services (TCS) has secured $1 billion from private equity firm TPG as part of a multi-year, $2 billion project to build a network of gigawatt-sized data centers in the country.

The project, called HyperVault, comes as demand for artificial intelligence computing grows faster than companies can build the power-hungry infrastructure needed to support it.

The gap between supply and demand for AI computing in India is particularly stark: the country produces nearly 20% of the world’s data, but represents Only about 3% of global data center capacity. Big tech companies and cloud providers have been there as well Investing billions of dollars To expand local capabilities and benefit from the country’s growing adoption of artificial intelligence products.

Through HyperVault, TCS and TPG plan to develop high-density, liquid-cooled data centers that have the power and network capacity required to support advanced AI workloads across key cloud regions, the companies said.

Liquid cooling and high-density rack designs are becoming popular because the GPUs needed to run AI inference and training use much more power and generate more heat than traditional CPU servers. But such designs also raise questions about resource use in countries like India, where water scarcity is already a concern.

In urban centers such as Mumbai, Bengaluru and Chennai, where much of India’s data center capacity is concentrated, the current water stress may complicate operations. S&P Global, citing Uptime Institute estimates, male Carrying a 1-MW data center can require up to 25.5 million liters of water per year for cooling, adding pressure to already strained infrastructure.

The rapid construction of AI data centers would increase pressure on energy and land use in India, two other constraints identified by industry analysts. High-density AI clusters require reliable electricity supplies and large areas of industrial land, two requirements that are increasingly difficult to secure in large urban areas.

However, global technology companies are treating India as their frontier for building AI infrastructure. Local and global technology companies have announced investments of more than $32 billion over the past two years to expand data center infrastructure in the country, according to S&P Global.

In January, Microsoft said it would do so Investing $3 billion over two years in cloud infrastructure and artificial intelligence in India, and in October, Google said it would do so Spending $15 billion over five years To build a gigawatt-scale AI data center in the southern state of Andhra Pradesh. And back in 2023, Amazon has committed to doing so $12.7 billion to build out AWS cloud infrastructure In India until 2030.

TCS said it will work with hyperscalers and AI companies to design, deploy and operate AI infrastructure as the platform expands. The company plans to build about 1.2 gigawatts of capacity in its initial phase.

More than 95% of India’s new data center capacity over the next five years will come from leased facilities, and the rest will be operated by hyperscalers building dedicated AI infrastructure, according to S&P Global estimates. Local players love it Reliance Industries and control It is also expanding its data center capacity to meet growing demand.

TCS and TPG forecast that total data center capacity in India could exceed 10 gigawatts by 2030, compared to about 1.5 gigawatts today.