The race for AI isn’t just about powerful software; India is focussing on building solid infrastructure to back the software…
For the last two decades, digital growth in India has always hovered around software development and internet services. But with the advancement in AI, that has been changing over the last couple of years.
Every AI model – chatbot or cloud application – requires huge computing power and this is housed inside a data centre. As companies across the world race to deploy AI powered systems, the need for AI-supportive facilities has also increased.
India’s AI Infrastructure Revolution
The investments have been flowing in. Brookfield Asset Management has announced around 6.5 GW of AI-focused data centre capacity to come online in India over the next five years. HCLTech also revealed plans for a ₹14,257 crore ($1.48 billion) AI data centre project in Odisha.
All of this goes to show that Indian as well as international companies have earmarked India as a major AI infrastructure destination.
According to a report in KPMG, India currently holds only 2-3% of global data centre capacity despite generating nearly one-fifth of the world’s data. This suggests that there is a major scope for expansion. The consultancy firm estimates that this could create a USD 90 billion opportunity across the next decade across various industries.
AI Boom Powering Multiple Industries
Unlike usual office spaces, AI data centres require specialised infrastructure capabilities.
AI facilities require high-voltage electrical equipment, advanced cooling systems, fibre connectivity, security and backup power. Building them requires engineering services and specialised construction firms. All of this is creating opportunities that go well beyond the technology sector.
The real estate industry has already shifted its focus on providing uninterrupted power supply, fibre access, regulatory approvals and partnering with hyperscalers. As far as industry experts are concerned, AI-ready campuses are set to become the fastest growing commercial real estate segments over the next decade.
According to Savills India, data centres have already become one of the biggest drivers of real estate investment. In the first half of 2026 alone, they have pushed private equity inflows into Indian real estate up 33%.
The Biggest Challenge for this Expansion
It’s not so much about installing the servers as it is about providing uninterrupted electricity, nonstop cooling and land suitable for the servers.
Data centres consumer huge amounts of power around the clock and also generate significantly more heat than traditional cloud computing. This increases the need for sophisticated liquid or air-cooling technologies and renewable energy sources.
Savills India estimates that India’s operational data centre capacity reached 1.8 GW during the first half of 2026. This is after a 59% growth since 2025. The report also identifies power availability and land acquisition as the industry’s biggest constraints as capacity is projected to exceed 7 GW by 2030.
Water supply is becoming another major concern as cooling these data centres can take a toll on local water resources. An AI data centre in Australia had attempted cooling itself with recycled water but had to abandon the plan due to infrastructure limitations. This highlights the broader sustainability challenges that lie ahead for these data centres.
The Last Word
There is a lot of scope in becoming a leading AI data centre market. It would attract cloud providers, AI startups, semiconductor investments and advanced digital services. As things stand, India has a fantastic opportunity to become a regional hub for AI infrastructure serving businesses across Asia.
The next decade will determine whether India becomes just another major AI consumer or one of the leading countries in the world when it comes to powering it!
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