Understanding Data Centres: Global Trends and Top 5 Indian Players!

The Pick and Shovel of AI revolution: Lessons from the California Gold Rush

During the California Gold Rush of the 1850s, thousands of people rushed westward hoping to strike it rich. However, it wasn’t the gold miners who earned the most consistent profits — it was those who sold them the “picks and shovels” needed for mining. Businesses supplying essential tools, equipment, and infrastructure became the real winners.

In today’s world, data centres represent the modern “pick and shovel” opportunity in the digital and AI revolution. Instead of betting directly on which AI company will succeed, investors can focus on those building the supporting backbone — the servers, networks, and power systems that every AI and cloud company depends on.

What Are Data Centres and Why They Matter

A data centre is a specialized facility that houses powerful computers, servers, and networking equipment designed to store, process, and distribute large volumes of digital data. Every online activity—from streaming videos and using mobile apps to online banking and AI model training—relies on data centres operating behind the scenes. They form the backbone of the internet, cloud computing, and artificial intelligence, enabling businesses, governments, and individuals to securely access and manage digital information around the clock.

Global Data Centre Industry: Overview and Outlook

The global data centre market, valued at around USD 350–380 billion in 2024, is projected to reach USD 650 billion by 2030, growing at a CAGR of nearly 10 per cent. Capital expenditure crossed USD 430 billion in 2024 and could exceed USD 1 trillion by 2029, reflecting a massive capacity build-up to meet rising data demand.

North America leads with over 40 per cent market share, while Asia Pacific is the fastest-growing region (CAGR 13 per cent) led by China, Japan, and India. Europe’s growth is supported by renewable energy adoption and AI infrastructure investments.

India’s Data Centre Boom: An Emerging Global Hub

India is now one of the world’s fastest-growing data centre markets, fuelled by digital transformation, cloud adoption, and strong government policy support. The Indian market, worth USD 5–7 billion in 2024, is expected to reach USD 12–25 billion by 2030. Installed capacity has doubled to 1,400 MW and could reach 4,500–8,000 MW by 2030, with total investments crossing USD 100 billion by 2027. Mumbai, Delhi-NCR, and Bengaluru account for over 60 per cent of India’s capacity, while Chennai, Hyderabad, and Pune are rising as emerging hubs.

India’s low construction cost (around USD 6.6 per watt in Mumbai), 19 submarine cables, and skilled workforce strengthen its appeal. However, power reliability, land constraints, and sustainability challenges remain key hurdles as data centre power demand may quadruple by 2030.

Key Demand Drivers

• Artificial Intelligence and Machine LearningArtificial Intelligence and Machine Learning: AI workloads are set to contribute nearly 70 per cent of total data centre demand by 2030, driven by GPU-intensive computing and the need for advanced cooling systems. India’s AI Mission is further accelerating domestic infrastructure expansion.
• Cloud Expansion: Global hyperscalers such as AWS, Azure, and Google Cloud continue rapid capacity additions, with the cloud market projected to reach USD 319 billion by 2030. Indian enterprises are also swiftly migrating workloads to the cloud.
• Edge Computing and 5G: The rise of IoT devices and 5G networks is pushing data processing closer to users, spurring a wave of edge data centres worldwide, including in India’s tier-2 cities.
• Data Localization: Global and domestic regulations mandating local data storage—such as RBI and MeitY rules in India—are driving strong demand for localized infrastructure.
• Digital Consumption: Rising internet penetration, smartphone adoption, and data-heavy applications have sharply increased per-user data consumption.
• Government Support: Indian states are offering land and power subsidies of up to 50–100 per cent, tax benefits, and infrastructure incentives, encouraging large-scale investments in new facilities.

Top 5 Indian Listed Companies in Data Centre Business

1. Tata Communications LtdTata Communications Ltd: Operates 44 global and 22 Indian data centres, offering colocation, cloud, and AI-ready infrastructure. With an integrated submarine network and managed cloud services, it connects 60 per cent of the world’s cloud giants.
2. Bharti Airtel Ltd: Nxtra operates 14 large and 120+ edge  data centres, targeting 400 MW capacity. Backed by Carlyle Group, it’s India’s leading sustainable and AI-enabled data centre provider.
3. Anant Raj Ltd: Once a real estate developer, it’s now pivoting to data centres with plans to scale from 28 MW to 307 MW by FY32. The company’s land reserves in NCR give it a major cost advantage.
4. RailTel Corporation of India Ltd: A government-owned PSU leveraging 60,000 km of optical fibre and Tier-III data centres. RailTel is expanding into edge data centres at railway stations and new 30 MW facilities across India.
5. Netweb Technologies India Ltd: India’s only indigenous high-performance computing manufacturer, partnering with NVIDIA. Recently bagged a Rs 1,734 crore order for sovereign AI infrastructure, making it a top beneficiary of AI-driven data demand.

Conclusion

India’s data center industry stands at the heart of the digital economy’s next growth wave. Driven by AI adoption, cloud migration, and data localization mandates, the sector is witnessing unprecedented infrastructure expansion. With strong policy support and rising digital consumption, India is poised to become a global data hub. Though valuations are rich, long-term structural demand and technological upgrades make data centers — the digital factories of the future.