New Delhi: HCLTech has announced plans to enter the AI data centre business with an investment of up to Rs 3,500 crore, betting on rising demand for artificial
intelligence infrastructure. The statement was made at the company’s most recent quarterly earnings call, when its CEO and Managing Director C Vijayakumar indicated that AI computing demand will pick up significantly in the next few years.
The investment announcement coincides with HCLTech’s job cuts. The firm’s workforce decreased 3,292 in the April-June quarter to 223,889 as of June 30 from 227,181 at the end of March, the company said. The contrasting developments underscore the changing trajectory of India’s IT industry in its approach to AI.
HCLTech plans AI infrastructure expansion
During the earnings call, Vijayakumar announced that HCLTech would invest up to Rs 3,500 crore in the initial phase of the AI data centre, and it could expand AI data centre capacity to 50 megawatts (MW).
“We will make a strategic investment of up to Rs 3,500 crores and with a potential to scale up to 50 MW capacity,” he said.
AI data centres are the backbone of running big AI models and cloud-based AI services. The use of AI applications is on the rise and companies are investing heavily in computing infrastructure to support their ever-increasing demands for computing power.
Company sees AI as a long-term growth opportunity
HCLTech is now talking to potential customers and is nearing a deal in this area, Vijayakumar said. He said the data centres will be the basis for providing full AI solutions, comprising GPUs, AI models and enterprise solutions, for instance.
“AI has fundamentally changed the economics of computing. For us, the data centre is the foundation for delivering full-stack AI solutions,” Vijayakumar said during the conference.
He added that demand for sovereign data infrastructure is also growing, as governments and enterprises try to maintain critical workloads within their borders. HCLTech has already made an investment of $150 million in an Indian startup on AI called Sarvam AI, and it has made an agreement with OpenAI to implement ChatGPT Enterprise in various aspects of its business.
Indian IT firms increase AI investments
HCLTech’s announcement is a reflection of the trend in India’s IT industry. Despite the fear of the demise of traditional IT services, leading companies are putting more resources into AI hardware and software than they are taking out of traditional systems.
Tata Consultancy Services (TCS) had announced last year its plans to spend approximately $6 billion to add 1 GW of data centre capacity in the next five to seven years. The firm also announced it will recruit almost 8,900 forward deployed engineers to assist clients in deploying AI solutions.
