July 24 (Reuters) - India's HCLTech said on Friday it would invest 142.57 billion rupees ($1.48 billion) to set up its first AI data center in the eastern state of Odisha in partnership with homegrown startup Sarvam AI.
India’s IT services firms are entering the data center business to capitalise on demand from AI and cloud computing while diversifying beyond their traditional outsourcing operations.
HCLTech's investment will include financial support from the Odisha government, the company said.
The project, based in the state capital of Bhubaneswar, will utilise HCLTech's full-stack AI capabilities and Sarvam's foundation models to offer sector-specific AI applications to both government-owned and private companies.
Last month, HCLTech acquired a 10.5% stake in Sarvam AI for $150 million.
Additionally, India's third-largest IT firm said it is also opening a technology centerin Bhubaneswar, which will house 5,000 employees and start operations by 2028.
HCLTech CEO C Vijayakumar in a post-earnings press conference last week said that the company wants to deliver full-stack AI services, with data centers being a part of the value chain.
"...it's the data centre, it's the GPUs, it's the models, it's the applications that we will deliver on top of it. The overall value creation is significantly of a very different magnitude when you really look at this as a full stack, and that's really what we want to play," he said.
In November, larger peer Tata Consultancy Services' announced plans to invest $2 billion to develop AI data centers in partnership with private equity firm TPG.
The AI boom has spurred a rush among companies to pour money into data centers, with India seen as a key market due to its large internet user base and lower power and operating costs.
($1 = 96.5425 Indian rupees)
(Reporting by Abhirami G and Haripriya Suresh in Bengaluru; Editing by Sonia Cheema)
