RIL JV, L&T lead $13.5bn data centre investment surge, Vizag a key location

Hyderabad: India’s data-infrastructure buildout hit a $13.5-billion inflection point on Wednesday, with a Reliance Industries Ltd (RIL) joint venture and Larsen & Toubro (L&T) announcing large-scale investments in data centres, driven by surging demand for artificial intelligence (AI) applications.

The announcements marked one of the largest single-day commitments to India’s digital capacity, pushing total announcements this year to nearly $60 billion. Of this, nearly $53 billion has been announced cumulatively by RIL, L&T, the 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-headquartered real estate investment trust Digital Realty, announced an $11-billion investment over five years to set up a 1 gigawatt (GW) data centre in Visakhapatnam, Andhra Pradesh.

Alongside, L&T, India’s largest engineering and construction company, said it plans to spend nearly $2.5 billion over five years to set up five data centres — one of which will be in Visakhapatnam — with net capacity of at least 300 megawatt (MW)—with potential to expand more.

To be sure, L&T started its own commercial data centre operations with its first client in December last year. RIL, meanwhile, has forayed into data centres for the first time—after chairman Mukesh Ambani said that the group will invest heavily in AI infrastructure during the company’s AGM on 29 August.

Wednesday’s announcements would also establish Visakhapatnam as India’s latest data centre hub, with over $26 billion committed to data centre facilities of at least 2GW by 2031. Once built, this would surpass the current data centre capacity of the entire country, estimated to be 1.4GW by financial analytics platform S&P Global.

Industry experts noted that gigawatt-scale data centres are emerging as a utilities-style business for India’s conglomerates—built on renewable power, long-dated financing, and sovereignty requirements—effectively making homegrown firms the landlords to global cloud providers.

“As AI ramps up, India’s potential for data centre capacity growth will not be limited to 5GW in the next decade,” Prashant Chiranjive Jain, head of corporate centre at L&T, said at a media roundtable on Wednesday. “We expect the growth to be even faster, as the demand for sovereign AI loads increases.”

Jain added that in the next five years, L&T may increase data centre facilities that will be owned, operated and managed by the company, “and we’ll cater to about 10% of India’s total data centre workloads by then”.

Seema Ambastha, chief executive of L&T data centre business, added that Visakhapatnam will be one of five key centres across which L&T will build out its facilities, since it has landing ports for subsea internet cables.

“We have a presence in Chennai and Navi Mumbai, and we’ll be scaling up operations across other facilities in Bengaluru, Hyderabad and Visakhapatnam,” she said at the same media roundtable.

“The company is building India’s next-generation digital infrastructure through AI-native, purpose-built data centres, designed for unmatched performance, scalability and sustainability,” Digital Connexion said in a statement on Wednesday. “It has a campus in Chennai, and another that is being constructed in Mumbai’s Chandivali area. Both are strategically located for low-latency, carrier-neutral connectivity.”

A note by analysts at Morgan Stanley further said that beyond internal usage, RIL’s 1GW data centre play is likely to also be leased out in the ‘data centre-as-a-service’ format offering.

The new landlords

Industry stakeholders said that for top conglomerates, data centres represent a national utilities business model—and not just a foray into technology.

“The gigawatt-class plans show an understanding that in the AI era, compute is constrained less by chip availability and more by electricity, cooling, and interconnects,” said Sanchit Vir Gogia, chief executive of technology consulting firm, Greyhound Research.

“Reliance’s 3GW campus in Jamnagar, Adani’s 1GW Visakhapatnam project (with Google), and TCS’s $7 billion entry into AI data centres are all designed around renewable power procurement and long-dated financing, not speculative real estate,” he said.

Gogia added that the new push from Indian firms make the homegrown companies “the landlords, and foreign cloud firms their tenants”.

“This shift is permanent because it aligns with both policy and profit. Sovereignty rules mandate local storage, energy costs dictate local sourcing, and investors reward those who can monetize long-term utility returns. In short, the next wave of Indian data infrastructure will be led by conglomerates that can underwrite megawatts, not just megabytes,” he said.