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India's largest IT services company, Tata Consultancy Services, has taken a decisive step into the AI infrastructure arena. Through a partnership with private equity firm TPG, TCS is channelling up to Rs 18,000 crore into HyperVault, its wholly owned subsidiary dedicated to building AI-ready data centres with capacity exceeding 1 gigawatt.
The market's tepid response to this announcement stems partly from expectations set during an earlier earnings call, when TCS management outlined plans for 1 GW of capacity that would require $6.5-7 billion in investment. Nevertheless, with this move, TCS becomes the first Tier 1 IT company in India to make a concrete commitment to the AI infrastructure space.
We pointed out here that Gartner recently predicted that by 2026, global spending on AI-integrated software will overtake spending on traditional software. By establishing HyperVault now, TCS is positioning itself to capture the infrastructure layer supporting this AI boom.
HyperVault distinguishes itself from conventional data centres in several fundamental ways. As the exclusive platform for all of TCS's AI and non-AI data centre operations, it's purpose-built for the demanding requirements of artificial intelligence workloads.
While most traditional Indian data centres rely on air cooling and were designed primarily for general enterprise hosting and cloud services, HyperVault features liquid-cooled facilities with high rack densities.
TCS plans to build over 1 GW of AI-ready capacity, with the initial phase adding 100-200 megawatts over the next 18-24 months, backed by $600 million to $1 billion in investment. To put this in perspective, India's entire colocation data centre market added just 258 MW of capacity in 2023.
HyperVault's approach differs from established players such as CtrlS, Yotta, STT GDC, and Netmagic, which primarily operate colocation facilities. Instead, HyperVault positions itself as both an infrastructure provider and a technology partner, working directly with hyperscalers and AI companies to design, deploy, and optimise AI infrastructure for service delivery.
The opportunity is substantial. India generates nearly 20 percent of the world's data, yet accounts for only about 3 percent of global data centre capacity—a glaring supply-demand mismatch. Industry estimates indicate that India's data centre market will expand from approximately 1.5 GW today to more than 10 GW by 2030.
With HyperVault, TCS enters an increasingly competitive landscape. Microsoft has committed $3 billion over two years, Google has pledged $15 billion over five years, and Amazon has announced $12.7 billion through 2030 for its captive facilities in India. According to S&P Global, local and global technology firms have announced over $32 billion in data centre infrastructure investments in the country over the past two years alone.
While TCS's infrastructure play is strategically sound, it raises a broader question about the role of Indian technology companies in the global AI revolution.
When India's largest IT firm chooses to pursue substantial buybacks rather than invest in next-generation technologies, it reinforces a familiar trend. Indian companies continue to be positioned as providers of infrastructure and services rather than pioneers in cutting-edge technological innovation.
The question isn't whether TCS's HyperVault investment is wise — It clearly addresses a critical infrastructure need. Rather, it's whether India's technology giants will ever graduate from building the foundations to creating the transformative technologies that reshape industries. For now, companies like Microsoft, Google, and OpenAI continue to lead at the frontier while India's best and brightest focus on enabling their success.
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