Tata Consultancy Services (TCS) has announced a strategic partnership with global investment firm TPG to support the growth of its AI data center business, HyperVault. TPG is investing approximately $1 billion (8,820 crore rupees) in the data center venture.
With this investment, TCS aims to respond to the explosive growth in demand for computing power for AI applications. HyperVault aims to build AI-ready data centers with capacity in excess of 1 gigawatt (GW) in the coming years.
The total investment commitment from both partners amounts to a maximum of Rs 18,000 crore. TPG will contribute up to Rs 8,820 crore of this through its climate fund TPG Rise Climate and its Asia Real Estate business.
In return, the TPG will have final shareholding between 27.5% and 49% in HyperVault. Bringing in TPG as a strategic investment partner will help TCS drive stronger returns to its shareholders, reduce its capital outlay, and create long-term value for the data center platform.
TCS’ HyperVault will deliver secure, reliable, large-scale AI-ready infrastructure for hyperscalers and AI-driven organizations. It will offer purpose-built, liquid-cooled data centers with high rack densities, energy efficiency and network connectivity across all key cloud regions.
TCS will work closely with hyperscalers and AI companies to design, deploy, and optimize AI infrastructure, to enable world class service delivery of AI services. TCS is poised to lead the AI-driven transformation globally, with its deep partnerships with hyperscalers and AI companies, and full suite of AI solutions spanning AI data centers, Cloud, AI platforms, AI-led IT services and industry solutions to help its customers thrive in an AI-first world.
“I am delighted to have TPG join us in our journey to build large GW-scale AI data centers in India, tapping the rapidly growing AI demand. It will further strengthen our partnership with hyperscalers and AI companies,” said N. Chandrasekaran, Chairman, TCS. “With this capability, TCS is uniquely positioned to deliver complete AI solutions for its customers and partners. We are excited and committed to play a leading role in creating world-class AI infrastructure and solutions for the industry and work towards making TCS the largest AI-led technology services company.”
The investment comes at a time when the Indian data center market is experiencing strong growth. India currently has a data center capacity of about 1.5 GW which is expected to exceed 10GW by 2030. According to industry estimates, India’s data center market has attracted nearly $94 billion in investments since 2019.
Data centers are a multifaceted asset class and sit at the intersection of green energy infrastructure, technology and real estate. We look forward to bringing TPG’s sectoral expertise across these asset classes and working together with TCS to drive India’s next wave of digital infrastructure innovation in a climate-positive manner and build a more resilient future for the country’s digital and data economy,” said Jim Coulter, Executive Chairman of TPG and a Managing Partner of TPG Rise Climate.
The transaction is subject to conditions precedent and statutory approvals.
