India’s Tata Consultancy Services — among the world’s largest IT consulting firm — has secured a $1 billion in investment from US private-equity major TPG to accelerate the build-out of its newly formed data-center subsidiary, marking the first major capital commitment behind the company’s plan to become a large-scale infrastructure provider for the global artificial-intelligence market.
TPG will acquire up to a 49% stake in HyperVault AI Data Centre Pvt., a unit of TCS established in October to house its data-center expansion program. The investment, worth ₹8,820 crore, is part of a broader funding plan under which TCS and TPG will together deploy as much as ₹18,000 crore over the next several years, the companies said Thursday in regulatory filings. TCS, which will retain at least 51% ownership, is targeting more than 1 gigawatt of capacity by 2031, a significant shift for a company that has historically preferred asset-light service delivery and avoided large capital-intensive businesses.
As per media reports, Deepesh Nanda, currently chief executive of Tata Power Renewable Energy Ltd., is expected to take charge of HyperVault once the venture is operational. TCS is preparing to begin construction on its first hyperscale facility in Navi Mumbai, designed to exceed 120 megawatts and expected to come online within 18 months. The deal marks TPG’s second major investment in a Tata Group company after its 2021 commitment to Tata Motors Ltd.’s electric-vehicle unit. It is also the second foreign investment this year in an emerging business within the conglomerate, following AESC Group Ltd.’s stake purchase in Tata’s battery-storage arm.
“I am delighted to have TPG join us in our journey to build large GW-scale AI data centers in India, tapping the rapidly growing AI demand. It will further strengthen our partnership with hyperscalers and AI companies. With this capability, TCS is uniquely positioned to deliver complete AI solutions for its customers and partners. We are excited and committed to play a leading role in creating world-class AI infrastructure and solutions for the industry and work towards making TCS the largest AI-led technology services company,” TCS Chairman N. Chandrasekaran said in an official statement.
The move marks a break from the traditional business model of India’s IT outsourcing industry, which has, for a long time, focused on offshore development, cloud migration, and enterprise application work for global clients. Domestic operations accounted for only about 6% of TCS’s $30 billion in annual revenue last year, but the company now sees the domestic market — particularly AI, telecom, and public-sector workloads — as a growth segment. In addition to this, the domestic data-center ecosystem has expanded rapidly, owing to the rising adoption of 5G, regulatory requirements increasingly mandate local storage of sensitive data, and enterprises deploy AI-driven applications requiring high-density compute. Mumbai and Chennai collectively account for nearly two-thirds of India’s 1.03 GW installed capacity, according to industry estimates. Analysts expect total domestic capacity to reach 3 GW by 2030. Other domestic and global firms — including Reliance, Adani, NTT Data, CtrlS, and Google — have announced large investments, with Google committing $15 billion to a 1 GW AI-focused facility in Visakhapatnam earlier this month. Sector observers say the next wave of growth will hinge on power availability, energy efficiency, and sustained demand from hyperscalers.
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