RIL JV, L&T lead $13.5bn data centre investment surge, Vizag a key location
Hyderabad: India’s data infrastructure development reached a $13.5 billion milestone on Wednesday, with Reliance Industries Ltd (RIL) joint venture and Larsen & Toubro (L&T) announcing large-scale investments in data centres, driven by rising demand for artificial intelligence (AI) applications.
The announcements constituted one of the largest single-day commitments to India’s digital capacity, bringing total announcements this year to nearly $60 billion. Of this, around $53 billion was cumulatively announced by RIL, L&T, Adani and Tata groups and the Big Tech trio of Google, Amazon and Microsoft.
On Wednesday, Digital Connexion, RIL’s joint venture with Canadian asset management firm Brookfield and US-based real estate investment trust Digital Realty, announced an investment of $11 billion over five years to set up a 1 gigawatt (GW) data center in Visakhapatnam, Andhra Pradesh.
However, India’s largest engineering and construction company L&T said it plans to spend around $2.5 billion over five years to set up five data centers (one of them will be in Visakhapatnam) with a net capacity of at least 300 megawatts (MW) and potential for further expansion.
Of course, L&T started its commercial data center operations with its first customer in December last year. Meanwhile, RIL has made its foray into data centers for the first time after chairman Mukesh Ambani said at the company’s AGM on August 29 that the group would invest heavily in AI infrastructure.
Wednesday’s announcements will also make Visakhapatnam India’s newest data center hub, with over $26 billion committed to at least 2GW of data center facilities by 2031. Once built, this will exceed the entire country’s current data center capacity, estimated at 1.4GW by financial analytics platform S&P Global.
Gigawatt-scale data centers are emerging as a utility-style business built on renewable energy, long-term financing and sovereignty requirements for India’s conglomerates, effectively turning domestic firms into hosts for global cloud providers, industry experts said.
“As AI accelerates, India’s data center capacity growth potential will not be limited to 5 GW in the next decade,” L&T corporate center chairman Prashant Chiranjive Jain said at a media roundtable on Wednesday. “We expect growth to accelerate even further as demand for sovereign AI payloads increases.”
Jain added that over the next five years, L&T will be able to increase the data center facilities that the company will own, operate and manage, and “by then we will cover around 10% of India’s total data center workload.”
Seema Ambastha, managing director of L&T data center business, added that Visakhapatnam will be one of the five important hubs where L&T will set up its facilities as it has landing ports for undersea internet cables.
“We have presence in Chennai and Navi Mumbai and will increase our operations in other facilities in Bengaluru, Hyderabad and Visakhapatnam,” he said at the same media roundtable.
“The company is building India’s next-generation digital infrastructure through AI-driven, purpose-built data centers designed for unparalleled performance, scalability and sustainability,” Digital Connexion said in a statement on Wednesday. “It has a campus in Chennai and another under construction in Mumbai’s Chandivali district. Both are strategically positioned for low-latency, carrier-agnostic connectivity.”
A note by analysts at Morgan Stanley also said that RIL’s 1GW data center usage could also be leased beyond internal use in a “data center as a service” format offering.
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For top conglomerates, data centers represent not just a breakthrough in technology but the national utilities business model, industry stakeholders said.
“Gigawatt-class plans demonstrate the understanding that computing in the age of AI is less constrained by chip availability and more by electricity, cooling and interconnects,” said Sanchit Vir Gogia, managing director of technology consulting firm Greyhound Research.
“Reliance’s 3GW campus in Jamnagar, Adani’s 1GW Visakhapatnam project (with Google) and TCS’s $7 billion foray into AI data centers are all designed around renewable energy supply and long-term financing, not speculative real estate,” he said.
Gogia added that the new move by Indian companies makes domestic companies “their landlords and foreign cloud companies their tenants.”
“This shift is here to stay because it aligns with both policy and profit. Sovereignty rules mandate local storage, energy costs determine local resources, and investors reward those who can monetize long-term service returns. In short, the next wave of India’s data infrastructure will be led by conglomerates that can finance megawatts, not just megabytes,” he said.
