A man walks past a logo of Tata Consultancy Services (TCS) before a press conference announcing the company's quarterly results in Mumbai, India, January 11, 2024. REUTERS/Francis Mascarenhas
(Reuters) -India's Tata Consultancy Services and private equity firm TPG will form a joint venture to develop AI data centres, TCS said on Thursday, with both partners set to invest a total of 180 billion rupees ($2.03 billion) in equity.
The capital will be invested in tranches in the JV, called HyperVault AI Data Centre, over the next few years.
The companies also aim to raise $4.5-$5 billion through debt, TCS added, without providing details on the number or location of the planned data centres.
The recent boom in AI, which requires vast amounts of computing data, has fuelled a corporate rush to pour money into the technology globally and has led to an unprecedented growth in data centers across the world.
India's data centre capacity is expected to more than triple to 4.5 gigawatt by 2030 from current levels, according to real estate consultant Colliers.
TCS will be the majority partner in the JV with a 51% stake, while TPG will hold the remaining and invest up to 88.20 billion rupees.
"The move is similar to how big tech companies like Meta in the U.S. are also tapping PE firms to leverage the risk," said Pareekh Jain,founder of tech advisory firm EIIR Trend.
"The model will also benefit TPG by storing the data of their portfolio companies and the overall model, if successful, can be replicated for global expansion (by TCS)as well."
Last month, TCS had announced plans to invest up to $7 billion in a 1 GW data centre unit, which drew investor skepticism as analysts flagged limited overlaps with the company's core IT services and potential pressure on returns.
Brokerage BobCaps had called the plan "negatively surprising" as it flagged the IT services firm's more proactive M&A stance as a departure from its historical focus on organic growth.
($1 = 88.7220 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Sonia Cheema)
