Investment in data centres may cross USD 200 bn, nuclear energy important to power it: Vaishnaw

The government expects investment in data centres to cross USD 200 billion, about Rs 18.33 lakh crore, and nuclear energy will be an important component in the ecosystem to power it, Union Electronics and IT Minister Ashwini Vaishnaw said on Sunday.

The government expects investment in data centres to cross USD 200 billion, about Rs 18.33 lakh crore, and nuclear energy will be an important component in the ecosystem to power it, Union Electronics and IT Minister Ashwini Vaishnaw said on Sunday. The minister said the sector has received an investment proposal of USD 90 billion, of which USD 70 billion has started moving into the construction phase. ''It is very important that we have nuclear power because nuclear power will provide clean power which is required for long-term sustenance of the AI economy. We are expecting maybe even USD 200 billion of investment in data centres. Already USD 90 billion is announced. USD 70 billion is already getting into construction,'' Vaishnaw told reporters. From October-December, Google announced investment of USD 15 billion, Microsoft USD 17.5 billion, Amazon USD 35 billion and Digital Connexion USD 11 billion in AI infrastructure, including data centres in India. The government has proposed to boost investments in the data centre segment with a tax holiday till 2047. ''Recognising the need to enable critical infrastructure and boost investment in data centres, I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data centre services from India. It will, however, we need to provide services to Indian customers through an Indian reseller entity,'' Finance Minister Nirmala Sitharaman announced in her Budget speech. The government has also proposed to provide a safe harbour of 15 per cent on cost in case the company providing data centre services from India is a related entity. Parliament last month cleared the nuclear energy bill, Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI), that seeks to open the tightly controlled civil nuclear sector for private participation. Vaishnaw said the proposal on the data centre and announcement on nuclear power will be a very big journey. ''We are seeing a lot of interest from AI server manufacturers who would now like to manufacture AI servers in India. We are also seeing a lot of interest in bringing the ATMP for the AI chips in India. In future, we will definitely be looking at having our own AI chips. So, this way all the five layers, the services layer, the model layer, the chip layer, the infrastructure layer and the energy layer, all of them get covered because of these announcements,'' the minister said. The minister said the proposal on India Semiconductor Mission (ISM) 2.0 will boost chip manufacturing ecosystem in the country. ''ISM 2.0 will have a huge focus on equipment which are used for manufacturing semiconductors. Second, materials which are used for manufacturing semiconductors. Third, the design ecosystem. Fourth, creating very strong capabilities in six major activities -- RF, compute, memory, network management, controllers and power,'' he said. FM in the Budget proposed to expand the scope of ISM to include indigenous production of equipment, materials, design fullstack Indian IP, and fortify supply chains for local production of the electronic chips. ''We would like to have 50 major design companies, startups come up in our country. Of course, one or two of them will become the Qualcomm of the world or AMD or Intel,'' Vaishnaw said. The minister said there is a need to have AI infra within the country that is accessible to the domestic IT industry and enable them to provide services to the entire world. Therefore, there is a huge focus on making sure that the country's AI infra layer becomes a very prominent layer in the entire AI stack, he said. Once AI data centres, along with the manufacturing ecosystem for chips, server, are established in the country, the companies getting involved in the process will bring in a multiplier impact into the economy, the minister said. ''Third, the talent that we have... We have the second-largest talent pool in the world. That talent pool can be utilised best if the infra is available,'' the minister said.

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