TCS unit HyperVault will build a 1 GW capacity artificial intelligence data center campus in Hyderabad for hyperscalers and AI companies

Indian IT services company Tata Consultancy Services (TCS) plans to build a $7.4 billion data center campus, exploiting the opportunities offered by the white-hot global demand for artificial intelligence as it seeks to move away from the traditional outsourcing model.

The 1-gigawatt (GW) facility will cater to AI companies and large cloud providers, known as hyperscalers, offering support for AI training, inference, and other advanced workloads, TCS said on Saturday.

TCS unit HyperVault will build the campus – expected to be among the country’s biggest – in the southern city of Hyderabad. The buildout will happen in phases, based on customer demand and technology requirements, the Mumbai-based company said in a statement. 

TCS CEO K. Krithivasan said the project is part of the company’s “infrastructure-to-intelligence” strategy.

“AI demand is increasingly becoming infrastructure demand,” Sohom Banerjee, a technology analyst at the think tank CUTS International, told RT. He said TCS’s move should be viewed as some IT companies “moving vertically down the AI stack.” 

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TCS, which reported about $30 billion in revenue in the financial year ended March, last month signed a $1.5 billion deal with German luxury carmaker Porsche to ride the AI-led transformation in the auto industry. 

The data center investment comes as AI rapidly reshapes India’s labor-intensive, billing hours-based IT services industry – whose boom drove the country’s economic growth in the last two decades. The IT and business process management industry in India is currently valued at more than $300 billion by revenue.

Banerjee noted that while AI is putting pressure on parts of the IT consultants’ traditional business model, it is also simultaneously creating demand for a new layer of services around data centers, computing capacity, cloud platforms, AI models, and enterprise applications. 

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Large domestic AI data center investments move India from “being primarily a user and integrator of AI toward becoming an important location for AI compute,” he said.

Demand for such capacity is already rising. Property consultancy JLL estimates India’s data center capacity will grow from around 1.6 GW in mid-2026 to 6 GW by 2029. Hyderabad is emerging as one of the hubs for gigawatt-scale investment.

Local officials have said the project could generate up to 7,000 direct and indirect jobs across technology, construction, engineering, and operations.