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Summary
Following a record-breaking 2025, India’s data centre industry is bracing for a 20% jump in investments in 2026, driven by an insatiable demand for artificial intelligence infrastructure.
Dear reader, as 2025, a year of global tumult and volatility, rolls by, Mint's reporters and columnists look around the corner on what is coming in 2026—to help you know what to expect and prepare for it. Tell us what you think at feedback@livemint.com.
New Delhi: Investments in data centres in India, which are said to be the factories and storage houses of digital data and artificial intelligence models, are set to grow by up to 20% next year, following a record 2025. This growth could come in the form of new investments from global firms, as well as homegrown ones—leading to projections that India’s net available data centres will surge to 2 gigawatts (GW) in capacity by the end of next year, executives and analysts told Mint.
Hiranandani Group-backed Yotta Data Services is one such company, which in 2026 will look to scale up investments to bring nearly 500 megawatts (MW) of AI factories online, chief executive Sunil Gupta said. While Gupta did not disclose how much funding the company is likely to raise, he admitted that the company will look to raise large funding, as building data centres is expensive.
On 17 October, Chennai-based data centre company Sify Infinit Spaces filed its draft red herring prospectus with the markets regulator Securities and Exchange Board of India (Sebi) to raise up to ₹3,700 crore ($410 million). Of this, it plans to spend ₹2,500 crore ($280 million) for data centre expansions. By 2030, the company aims to scale up investments in data centres to $5 billion.
The two local firms mentioned above are likely to be joined by more Big Tech investments. OpenAI, the world’s largest AI startup, is expected to invest in a 1GW data centre for its ChatGPT-led AI applications and services in India—a market that chief executive Sam Altman said is OpenAI’s largest, globally.
Green energy companies are also likely to join the fray, with analysts stating investments of up to $30 billion being planned for data centres from top private renewable energy companies, in 2026 itself.
Capital inflow accelerates
Data centres, to be sure, are massive buildings stacked with high-performance computing chips, such as the graphic processing units (GPUs) that Nvidia, currently the world’s most valuable company, builds. The current calendar year has become a stellar one for data centres, as the adoption of AI has boomed and America’s Big Tech firms have doubled down on India as one of their largest markets worldwide.
According to most market estimates, adding 1 GW of data centre capacity requires $7-10 billion ( ₹60,000-90,000 crore) in investments.
“We have a multi-year, multi-billion-dollar investment plan for expanding our facilities as well. But, in 2026, what we expect to do is deploy more capital on the ground to expand our functional capacities, rather than just focusing on large milestone numbers. The demand for sovereign cloud platforms is rising sharply—and we’re looking actively at new investors, partners and real estate to spend on in 2026,” Yotta’s Gupta said.
It’s not just multi-year announcements that analysts expect to see next year. Stakeholders that Mint spoke with said that on-ground spending to build data centres is likely to increase by over 20% next year.
On 14 November, tech consulting firm Gartner stated that net spending on information technology infrastructure, which includes data centres, is expected to increase 20% year-on-year (y-o-y) to $176 billion next year. Venture capital firm Avendus said earlier this month that India’s data centres are likely to hit 2GW in active capacity in 2026, and are thus likely to draw on-ground investments of at least $25 billion in 2026 alone—higher than ever before.
Sovereign cloud demand
“Data centre systems spending is primarily driven by substantial AI infrastructure investments and multiple government programmes aimed at strengthening the local AI ecosystem. India has one of the largest consumer bases for AI services globally, attracting international investment in local infrastructure to support this expanding user base. Evolving data privacy and sovereign cloud requirements are expected to drive growth in this segment through 2026,” said Naresh Singh, senior director analyst at Gartner.
Sanchit Vir Gogia, chief executive at fellow tech consultancy firm Greyhound Research, added that dedicated data centre companies are likely to add to India’s investments in the coming year.
Big Tech’s massive investments over the next five years is a long-term commitment to setting up infrastructure to build large tech ecosystems in India, Gogia said. “This, in turn, will attract a larger set of companies that specialize in data centres, who will tap the demand for data centre space from smaller companies, as well as legacy listed Indian companies looking to adopt AI. This would add up to further multi-year investment commitments, as well as accelerate actual spending to bring data centres live in 2026,” he added.
"India is now firmly on the global data centre map, and the drivers that pulled money in during 2025 have not weakened. Enterprise demand continues to rise, hyperscalers are still expanding, AI has pushed compute decisions into boardrooms rather than IT backrooms, and sovereign cloud has moved from policy language into procurement reality. All of this sustains investor interest," Gogia said.
He added that while each of the above factors will continue to remain resilient, "what changes in 2026 is not the direction of money, but its behaviour."
"The capital of investment will not retreat; instead, it will sink deeper into execution. Land acquisitions will accelerate, and campuses will move from drawings to earthwork. Substations, transmission links, cooling infrastructure, and long construction schedules will absorb capital quietly and steadily. This is the phase where large cheques will continue to be written, but far fewer of them will make headlines," Gogia further said.
Through 2025, Microsoft pledged investments of $20.5 billion by 2030. Google said it will spend $15 billion by 2030 to build a 1GW data centre for AI operations in Visakhapatnam, Andhra Pradesh. Over the past three years, Amazon has pledged $15.3 billion by 2030 for data centres in Mumbai and Hyderabad.
This is not all. Tata Consultancy Services, India’s largest tech services company, announced its plan to invest up to $7 billion in building a 1GW data centre for AI workloads over five to seven years. On 20 November, it announced a $1 billion investment from US-based asset management firm TPG for its project.
Others include Larsen & Toubro, India’s largest engineering conglomerate, which on 26 November told Mint that it will expand its own data centre capacity to 300MW by 2030—at an investment of around $3 billion. Reliance Industries also joined the fray on the same day, announcing an $11-billion, 1GW data centre investment over five years through its joint venture operation, Digital Connexion.
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