India's data infrastructure buildout has reached a significant inflection point, with major investments totaling $13.5 billion announced recently by a Reliance Industries Ltd (RIL) joint venture and Larsen & Toubro (L&T). These substantial commitments are primarily driven by the surging demand for artificial intelligence (AI) applications, marking one of the largest single-day pledges to enhance India’s digital capacity. Cumulatively, total announcements this year for data infrastructure have nearly hit $60 billion, with RIL, L&T, the Adani and Tata groups, along with tech giants Google, Amazon, and Microsoft, contributing approximately $53 billion of this total.

On Wednesday, Digital Connexion, a joint venture between RIL, Canadian asset management firm Brookfield, and US-headquartered real estate investment trust Digital Realty, unveiled plans for an $11-billion investment over five years. This investment aims to establish a 1 gigawatt (GW) data center in Visakhapatnam, Andhra Pradesh. Concurrently, L&T, a prominent Indian engineering and construction company, announced its intention to invest nearly $2.5 billion over five years. This capital will be utilized to set up five data centers, including one in Visakhapatnam, with a net capacity of at least 300 megawatt (MW) and potential for further expansion. While L&T initiated its commercial data center operations with its first client in December last year, RIL is making its first foray into data centers, following chairman Mukesh Ambani's August 29 AGM statement about heavy investments in AI infrastructure.

These recent announcements are set to firmly establish Visakhapatnam as India’s newest data center hub. With over $26 billion committed to data center facilities of at least 2GW by 2031, Visakhapatnam's future capacity is projected to surpass the current estimated data center capacity of the entire country, which stands at 1.4GW, according to financial analytics platform S&P Global. Industry experts observe that gigawatt-scale data centers are rapidly evolving into a utilities-style business for India's conglomerates. This model is characterized by its reliance on renewable power, long-dated financing structures, and the fulfillment of sovereignty requirements, effectively transforming homegrown firms into the primary landlords for global cloud providers.

Prashant Chiranjive Jain, head of corporate center at L&T, emphasized the rapid growth potential, stating at a media roundtable that as AI demand intensifies, India’s data center capacity growth will not be limited to 5GW in the next decade, expecting an even faster expansion due to increasing demand for sovereign AI loads. He added that L&T plans to significantly increase its owned, operated, and managed data center facilities in the next five years, aiming to cater to approximately 10% of India’s total data center workloads by then. Seema Ambastha, chief executive of L&T data center business, highlighted Visakhapatnam's strategic importance as one of five key centers for L&T's buildout, owing to its landing ports for subsea internet cables. She confirmed L&T's existing presence in Chennai and Navi Mumbai, with plans to scale operations across Bengaluru, Hyderabad, and Visakhapatnam.

Meanwhile, Digital Connexion is largely positioned to address internal demand through Reliance Intelligence, a Mukesh Ambani-backed RIL subsidiary. RIL stated that the company is developing India’s next-generation digital infrastructure through