TCS Secures $2 Billion in TPG Funding for AI Data Center Project in India
In a landmark move to enhance AI infrastructure, Tata Consultancy Services (TCS) has successfully secured $2 billion in funding from TPG Capital for its ambitious “HyperVault” initiative. This AI data center project comes at a crucial time as the demand for AI computing power escalates, outpacing the current capabilities of companies to establish the necessary energy-intensive infrastructure.
India’s demand-supply disparity for AI computing resources is particularly urgent. While the nation contributes nearly 20% of global data production, it boasts a mere 3% of the world’s data center capacity. Major technology firms and cloud service providers have poured billions into expanding local facilities to capitalize on India’s increasing adoption of AI technologies.
The shift toward liquid cooling systems and high-density server architectures is gaining traction. Such advancements are essential to manage the significantly higher energy consumption and heat generation of GPUs compared to traditional CPU servers. However, these designs raise sustainability concerns in water-scarce regions like India. According to S&P Global and Uptime Institute metrics, a single megawatt (MW) data center can consume up to 25.5 million liters of water annually for cooling, exacerbating existing resource challenges in urban centers like Mumbai, Bengaluru, and Chennai.
Industry analysts warn that the rapid development of AI-focused data centers may further strain India’s power supply and land usage, identified as significant bottlenecks. The demand for reliable electricity and large industrial land parcels in densely populated urban areas is becoming increasingly difficult to meet.
Despite these challenges, India is positioning itself as a pivotal location for AI infrastructure investment. Over the past 24 months, both local and international tech companies have announced over $32 billion in investments to bolster the country’s data center capabilities. Microsoft has pledged $3 billion in developing AI and cloud infrastructure, while Google plans to invest $15 billion over five years for a gigawatt-scale AI data center in Andhra Pradesh. Additionally, Amazon is set to invest $12.7 billion by 2030 to expand its AWS cloud infrastructure across India.
According to S&P Global, more than 95% of new data center capacity in India over the next five years is expected to come from leased facilities, with hyperscalers spearheading the creation of dedicated AI infrastructures. Local companies like Reliance Industries and CtrlS are also ramping up their investments to meet the surging demand for data services.
