Why India's AI future hinges on smarter data centres

Time of India

18-06-2025

Imagine building a skyscraper on sand. That's what India's AI ambitions could look like without rethinking data centres. As generative AI, 5G, and IoT explode, our digital economy's bedrock—data centres—is at a tipping point.Emergence of AI Data Centres in IndiaIndia's data centre market is sprinting at ~25% CAGR, fueled by AI's relentless demand for compute power. But here's the catch: while we generate 20% of global data, we hold just 3% of data centre capacity. The government's push for data localisation under the Digital Personal Data Protection Act (DPDPA) has further accelerated the establishment of local data centres, drawing significant investments from global giants like AWS, Microsoft, and Google, as well as domestic players such as Reliance Jio and Yotta Infrastructure. Recently, during the Union Budget presentation, Finance Minister Nirmala Sitharaman allocated INR 20 billion ($230 million) for the IndiaAI mission, which will be used to build AI and data centre infrastructure, including GPUs, data centres, and connectivity solutions.
AI isn't just code—it's hardware. Next-generation data centres need GPU clusters, liquid cooling, optical fibre cables, connectivity solutions, and renewable energy to handle workloads that are ten times denser than traditional setups. Projects like Yotta NM1 in Navi Mumbai and CtrlS Hyderabad exemplify the shift toward AI-optimised facilities, equipped with GPU clusters, advanced cooling, and renewable energy integration.
The Infrastructure Gap: A Strategic Imperative
Despite this momentum, India's AI data centre infrastructure faces significant challenges:
Real estate and Connectivity challenges
India's major metro markets like Mumbai, Chennai, Bengaluru, and Hyderabad dominate data centre capacity but face high land costs and limited availability of suitable sites. While metros benefit from robust fibre networks, many regions beyond metropolitan areas still suffer from limited fibre availability and high latency, impeding AI workloads that require ultra-low latency and high bandwidth.
Network Latency and Location Strategy
AI applications require ultra-low latency to function effectively, which means data centres must be located close to end users in major metropolitan areas. However, high population density and limited land availability complicate site selection. Addressing network latency requires not only proximity but also optimised connectivity infrastructure, including carrier-neutral facilities and high-speed interconnections within and between data centres.
Infrastructure Modernisation and AI-Readiness
Many existing data centres in APAC were designed before the AI era and are not equipped to handle the unique demands of AI workloads. This creates a gap that new developments and upgrades must fill by incorporating AI-ready features such as higher floor loading capacity, advanced cooling systems, and enhanced network capabilities.
Made in India solutions - India's data centre revolution demands locally engineered solutions to overcome unique challenges like connectivity gaps in tier 2 and 3 cities, unreliable power infrastructure, complex land acquisition hurdles, and the need for energy-efficient architectures tailored to extreme climatic conditions. This requires data centre solutions like driving demand for home-grown solutions that cater to hyper-scalable fibre backhaul, edge computing integration, etc.
Charting the path forward
The fundamental changes AI is bringing to data centres are truly remarkable. India's vision to become a global AI powerhouse hinges on bridging the digital infrastructure gap, requiring advanced connectivity solutions to build this infrastructure.
As AI continues to take centre stage, data centres built on agile and future-proof optical fibre foundations will evolve to provide immense compute power. This transformation will enable them to meet the industry's demands, including:
Agile, high-bandwidth connectivity for AI - AI workloads demand massive, low-latency data transfer within the data centre and between data centres (DCI). Legacy copper struggles with scale and distance. The industry requires high-speed, low-latency optical solutions. Pre-terminated systems ensure rapid, error-free deployment, which is crucial for scaling AI clusters.Massive scalability and future-proofing - India's data explosion requires infrastructure that can scale exponentially. Density is key to managing space and cost. High-fibre-count optical solutions offer unparalleled fibre density for scalable inter-facility links. Pre-terminated Systems are inherently designed for easy upgrades and massive bandwidth headroom, protecting investments.Ultra-low latency and high reliability - AI and real-time analytics demand near-instantaneous data movement. Innovative optical solutions compliant with international standards such as ANSI/TIA-942, TIA-568, ISO 11801 guarantee engineered reliability and signal integrity, minimising latency jitter and failure risk.
India's AI future depends on a holistic approach to digital infrastructure—one that integrates advanced optical connectivity, power-efficient cooling, and scalable physical digital infrastructure. India's AI race isn't just about algorithms; it's about reinventing infrastructure that's future-proof, sustainable, and inclusive. The question isn't if we'll bridge the gap—it's how fast.