AI Drives Surge in India's Data Centre Capacity

Artificial Intelligence is expected to drive a significant increase in data centre capacity in India, adding about 500 MW over the next four years. This sector has attracted attention from investors and is poised to grow at a compound annual rate of 26%. The market disruption is also driven by AI-specific needs.

Artificial Intelligence (AI)-led demand for data centres in India is projected to drive about 500 MW of capacity addition over the next four years, according to a report released by Avendus Capital on Wednesday.

India, one of the fastest-growing data centre markets globally, has seen its overall capacities double to about 1,011 megawatt (MW) in 2023 from about 540 MW in 2019.

Growing at a compound annual growth rate (CAGR) of about 26% over the next three years, the sector now attracts investors, ranging from growth-stage private equities to long-term pension and sovereign wealth funds.

(With inputs from agencies.)