India’s TCS gets TPG to fund half of $2B AI data center project
Tata Consultancy Services (TCS) has secured an investment of $1 billion from TPG as part of a broader $2 billion initiative aimed at constructing a network of gigawatt-scale data centers across India. This venture, named “HyperVault,” addresses the rapidly escalating demand for AI computing power, which currently outpaces the ability to develop the necessary infrastructure. India’s data generation nearly accounts for one-fifth of the global total, yet its share of global data center capacity remains around 3%, highlighting a pronounced disparity between demand and supply.
TCS and TPG intend to build liquid-cooled, high-density data centers designed to support the advanced AI workloads anticipated in major cloud regions. The use of liquid cooling and high-density rack configurations is becoming increasingly common due to the high power consumption and heat output of AI-focused GPUs compared to conventional CPUs. However, these designs raise environmental concerns, particularly regarding water usage in India, a country already facing water scarcity issues. Urban centers like Mumbai, Bengaluru, and Chennai, where most data centers are located, experience significant water stress. According to estimates, a data center with a 1 MW load might consume up to 25.5 million liters of water annually for cooling, exacerbating challenges posed by existing strained water infrastructure.
Beyond water, the growth of AI data centers is expected to place additional pressure on India’s power supply and land availability. AI clusters require dependable electricity and expansive industrial land, resources that are increasingly difficult to secure in densely populated metropolitan areas. Despite these obstacles, international tech firms view India as a pivotal area for developing AI infrastructure, contributing to investments exceeding $32 billion in data center expansion over the last two years. Major announcements include Microsoft’s $3 billion investment over two years for cloud and AI infrastructure, Google’s $15 billion commitment over five years to create a gigawatt-scale AI data center hub in Andhra Pradesh, and Amazon’s $12.7 billion funding plan to establish AWS cloud infrastructure through 2030.
TCS will collaborate with hyperscalers and AI companies to design, implement, and manage AI infrastructure as the HyperVault platform evolves, with plans to establish roughly 1.2 gigawatts of capacity initially. An estimated 95% of India’s new data center capacity in the next five years will come from leased facilities, while the rest is expected to be driven by hyperscalers constructing dedicated AI setups. Domestic players such as Reliance Industries and CtrlS are also expanding their facilities to address growing demand. Projections from TCS and TPG suggest that by 2030, India’s total data center capacity could rise to more than 10 gigawatts, a significant increase from approximately 1.5 gigawatts at present.
