HCLTech Announces $1.5 Bn Investment To Build Maiden AI

What happened

IT major HCLTech has signed a memorandum of understanding (MoU) with its invested company Sarvam AI and the Odisha government to set up an AI data centre within the state. 5 Bn). The state government is also expected to provide financial assistance for the project.

53 Lakh Cr by 2030. Amid this boom, major global tech players have also announced plans to set up data centres within the country in the past. For instance, Google has begun constructing a $15 Bn AI data centre hub in Visakhapatnam while Microsoft has also committed $3 Bn to expand its cloud and AI infrastructure in India. However, the boom also masks structural challenges.

Why it matters

The facility, which would be set up in the state’s capital Bhubhnashwar, would combine its infrastructure and enterprise capabilities with Sarvam’s models to build sector-specific applications for enterprise and government customers, the company added. Besides, the project, situated in the upcoming Odisha Sovereign AI Park, is expected to support multilingual AI services and local developer ecosystem growth.

The development comes days after HCLTech proposed its entry into the full-stack AI market. For the same, it intends to make a strategic investment of up to ₹3,500 Cr to establish AI data centers, with the potential to scale to 50MW of capacity. 5 Bn. HCLTech is the latest conglomerate to enter the AI race after Reliance Industries and Adani Group announced similar plans to scale in the AI ecosystem.

While Adani Group partnered with US-based manufacturing company Jabil Inc to build vertically-integrated AI and data centre infrastructure in June, RIL chairman Mukesh Ambani announced the group’s plans to invest up to ₹10 Lakh Cr in AI over the next seven years. Driving the conglomerates bid is the rapidly expanding AI data centre market, which is emerging within the country at a quiet but steady pace.

What to watch

Despite aggressive expansion plans, operators continue to grapple with high power consumption, limited access to reliable renewable energy, land acquisition hurdles, cooling requirements and rising capital costs. AI workloads are making data centres significantly more energy-intensive, raising questions over the country’s grid readiness and stainability. And amid this, citizen protests have also broken out in recent times.

As of now, hundreds of residents in Maharashtra’s Thane are protesting Amazon’s proposed 422MW data centre, citing fears over noise pollution from 193 backup diesel generators, high electricity demands and tree felling.