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Turning Vision into Impact: The Potential of AI Data Cities in India

March 20, 2025

AI

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AI data cities are a solution to drive India’s AI leadership

The global AI revolution is rapidly accelerating the demand for data centre capacity, driven by the increasing computational needs of AI systems. Our analysis predicts that India will need at least 35 GW of state-of-the-art data centre capacity by 2047 to become the leading AI training and development hub. Achieving this requires a strategic approach, integrating renewable energy, network, and skilled talent, while diversifying capacity across regions. Standalone data centres won’t suffice; India should focus on creating ‘AI data cities’—specialised zones and hubs of innovation designed to power AI innovation, accelerate AI research, and foster thriving ecosystems.

Each AI data city will house a cluster of gigawatt state-of-the-art AI data centres to meet global demand, attracting top-tier AI talent and resources to support key activities like training and inference for global models. These will serve as catalysts for research, development, and deployment of AI solutions across key sectors. Start-ups, renewable energy providers, high-end manufacturing and Industry 4.0 innovators will coalesce in these spaces, fuelling further innovation and economic growth. Moreover, AI data cities will spur the development of housing, transportation, and essential civil services in and around these areas for people to live and work.

Our analysis estimates that this investment could contribute a cumulative USD 6.8 trillion in value added to India’s gross domestic product (GDP) from 2027 to 2047 and support more than 39 million jobs by 2047.


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