India’s Data Center Industry Set To Surge Driven By AI Adoption

Fuelled by the burgeoning adoption of Artificial Intelligence (AI), India’s data center industry is on the cusp of a remarkable expansion, with projections indicating a substantial increase in capacity and investments by 2026.

JLL Research released a report on Friday, forecasting that the data center industry in India will add 791 megawatts (MW) of capacity by 2026, necessitating approximately 10 million square feet of real estate space.

The anticipated surge will attract investments amounting to $5.7 billion, showcasing the growing significance of AI in driving infrastructure demands.

The report indicates that the escalating usage of AI will significantly propel the demand for Indian data centers, with estimates ranging between 650 to 800 MW during the period from 2024 to 2026.

This surge reflects the rapid digital transformation underway across various sectors in India.

India’s ambitious trajectory towards becoming the third-largest economy, with a projected GDP of $5 trillion by 2027 and a significant digital economy contribution of around 20%, is further catalyzing the growth of its data center industry.

Dr. Samantak Das Forecasts Digital Expansion To Drive India’s Data Center Industry Growth

Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, JLL, emphasized that this digital expansion will propel the growth of India’s data center industry. The industry plans to increase its capacity from 853 MW in 2023 to 1,645 MW by 2026.

Highlighting the country’s strategic focus on AI, underscored by initiatives like the India AI mission, aimed at fostering innovation, upskilling the workforce, and ensuring responsible deployment of AI technology, the report underlines the pivotal role of technology in shaping India’s economic landscape.

India’s data center sector has grown significantly from 350 MW in 2019 to 854 MW in 2023, aligning with rising digital usage trends.

Cloud Service Providers (CSPs), key players in offering IT infrastructure systems for data storage and computing power via the Internet, are adjusting strategies to meet the growing demand driven by AI.

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