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 data centers in the country.
The project, dubbed HyperVault, comes as the demand for AI computing is growing faster than companies can build the power-hungry infrastructure needed to support AI computing.
The gap between supply and demand for AI computing in India is particularly pronounced. India generates nearly 20% of the world’s data, but accounts for only about 3% of the world’s data center capacity. Major technology companies and cloud providers have invested billions of dollars to expand manufacturing capacity in the region and take advantage of the country’s growing adoption of AI products.
TCS and TPG plan to use HyperVault to develop liquid-cooled, high-density data centers with the power and network capacity needed to support advanced AI workloads across major cloud regions, the companies said.
GPUs required for AI inference and training use much more power and generate more heat than traditional CPU servers, making liquid cooling and high-density rack designs more common. But such designs also raise questions about resource use in countries like India, where water scarcity is already a concern.
In urban hubs like Mumbai, Bengaluru, and Chennai, where much of India’s data center capacity is concentrated, existing water stress can complicate operations. Citing estimates from the Uptime Institute, S&P Global said a 1MW data center load could require up to 25.5 million liters of water per year for cooling, putting pressure on an already strained infrastructure.
The rapid construction of AI data centers will further strain India’s power and land use, two bottlenecks that industry analysts point to. Dense AI clusters require a reliable power supply and extensive industrial land, two requirements that are becoming increasingly difficult to secure in metropolitan areas.
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Nevertheless, global technology companies are treating India as a frontier for building AI infrastructure. Local and global technology companies have announced more than $32 billion in investments over the past two years to expand the country’s data center infrastructure, according to S&P Global.
In January, Microsoft announced it would invest $3 billion over two years in India’s cloud and AI infrastructure, and in October, Google announced it would invest $15 billion over five years to build a gigawatt-sized AI data center hub in the southern state of Andhra Pradesh. And back in 2023, Amazon committed $12.7 billion to build AWS cloud infrastructure in India by 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 approximately 1.2 gigawatts of capacity in the initial phase.
Over the next five years, over 95% of new data center capacity in India will come from leased facilities, with the rest driven by hyperscalers building purpose-built AI infrastructure, according to S&P Global estimates. Local companies such as Reliance Industries and CtrlS are also increasing the capacity of their data centers to meet the growing demand.
TCS and TPG predict that India’s total data center capacity could exceed 10 GW by 2030, up from around 1.5 GW today.
