Rising AI adoption in India is projected to lead to the deployment of 650,000-700,000 GPUs in data centers over the next five years, creating a significant investment opportunity of $23 billion. The country’s data center capacity is expected to grow at a 26% CAGR during this period, reaching 5 GW by 2030, fueled by AI-led infrastructure demand, increasing cloud usage, and digital adoption.
The report by Avendus Capital indicates that developers have a pipeline of over 3 GW, including 1 GW dedicated to AI data center capacity, requiring a total investment of nearly $25 billion in the next five years. India’s AI market is forecasted to expand from $13 billion in 2025 to $131 billion by 2032, with a 39% CAGR, driven by growing enterprise adoption and investments in domestic AI capabilities, such as large language models (LLMs).
Vaibhav Garg, Director of Infrastructure and Real Assets Investment Banking at Avendus Capital, stated that AI adoption is becoming a significant driver for next-generation infrastructure investments in data centers, complementing the sustained demand from cloud and digital workloads. The report also anticipates 3-4 IPOs in the next three years to play a crucial role in funding India’s data center growth, with Mumbai expected to remain the country’s primary data center hub, accounting for nearly half of the installed and upcoming capacity.
