India to get world’s largest data center in AI push

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India is expected to get the world’s largest data center by capacity, a move seen to significantly boost the development of artificial intelligence (AI).

Data centers are essential for AI as they offer the massive computing power, storage capacity, and high-speed networking required to train and operate sophisticated AI models.

Billionaire Mukesh Ambani’s Reliance Group is reportedly buying Nvidia’s (NASDAQ: NVDA) AI semiconductors and setting up a data center in Jamnagar, a town located in Prime Minister Narendra Modi’s home state of Gujarat. The data center is anticipated to have a total capacity of three gigawatts, a Bloomberg report said, quoting sources it did not identify. Currently, the largest data centers in operation are under 1 gigawatt in capacity. Reliance plans to run the new data center using renewable energy as much as possible.

According to the report, the project may cost between $20 billion and $30 billion, with the planned Reliance data center in India projected to be larger than Microsoft’s (NASDAQ: MSFT) 600-megawatt site in Virginia, the current largest data center.

The announcement comes days after United States President Donald Trump, Oracle CEO Larry Ellison, SoftBank (NASDAQ: SFTBY) CEO Masayoshi Son, and OpenAI CEO Sam Altman announced “Stargate,” an AI data center venture. Stargate is a joint effort led by Oracle, SoftBank, and OpenAI, which aims to invest $100 billion to $500 billion in developing AI infrastructure in the United States.

Speaking at the World Economic Forum (WEF) in Davos, Switzerland, Indian Information Technology Minister Ashwini Vaishnaw said India could maintain an economic growth of 6-8% as the nation prepares for a robust AI future. The minister emphasized the need to use AI responsibly, highlighting its immense potential for driving economic and social change.

“India’s approach to AI involves preparing the next generation for leadership in this transformative field. We are initiating AI-ready courses in 200 universities, much like the efforts we undertook for telecom and semiconductor technology,” Vaishnaw said. Initiatives like establishing 5G labs and supplying universities with state-of-the-art semiconductor design tools aim to empower India’s youth with the skills required to excel in AI.

According to the latest forecast from research and consulting firm Gartner, in 2025, spending on data center systems in India is expected to grow the fastest among IT sectors, rising by 19.1% to reach $5 billion. This surge nearly doubles the growth rate from 2024, reflecting businesses’ investments in AI-ready infrastructure for specific use cases. The trend is being driven by the adoption of accelerated servers optimized for AI workloads, as companies prioritize upgrading their technology to meet the needs of modern AI applications.

IndiaAI selects ten firms for GPU supply

IndiaAI, a federal government initiative launched in March 2024, has selected ten firms to procure 10,000 graphics processing units (GPUs) for the final bidding process.

These include Jio Platforms, Tata Communications, CMS Computers India Pvt Ltd, Ctrls Datacenters Ltd, E2E Networks Limited, Locuz Enterprise Solutions Ltd, Orient Technologies Ltd, NxtGen Datacenter and Cloud Technologies Private Ltd, Vensysco Technologies Limited, and Yotta Data Services Limited.

The IndiaAI Mission aims to procure over 10,000 GPUs in a public-private partnership to address the country’s computing capacity needs and develop a high-end AI ecosystem. GPUs are the backbone of AI processing and are becoming increasingly vital in data centers. Offering top-tier performance for AI training and inference, GPUs fuel companies’ demand and push them to invest in expanded storage and computing capacities.

In March 2024, India approved roughly $1.24 billion for the IndiaAI Mission. The initiative has earmarked 44% of the budget to build a compute capacity of over 10,000 GPUs over five years, to strengthen AI infrastructure and accelerate advancements in AI technology nationwide.

IndiaAI recently entered into a partnership with technology giant Microsoft to drive the adoption and development of AI in India. Microsoft has also announced plans to invest $3 billion in cloud and AI infrastructure in India over the next two years, including establishing new data centers.

In partnership with IndiaAI, Microsoft aims to skill 500,000 individuals by 2026, including students, educators, developers, government officials, and women entrepreneurs.

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