Tata Consultancy Services (TCS), India’s largest IT services company, has announced a significant strategic shift toward capital-intensive infrastructure by forming a joint venture with global private equity firm TPG. The partnership is dedicated to establishing large-scale, AI-focused, and Sovereign Data Centers across India.

The Joint Venture and Financial Commitment

The new data center business will operate under HyperVault AI Data Centre Ltd., a subsidiary of TCS. The companies plan to inject a total of up to ₹18,000 crore (approximately $2 billion) through a combination of equity and debt over the next few years to finance the build-out.

TPG has committed to invest up to ₹8,820 crore (about $1 billion) in the venture through its TPG Rise Climate fund and Global South Initiative. TCS will retain a majority stake of 51% in HyperVault, while TPG’s eventual shareholding is expected to fall between 27.5% and 49%. This landmark deal represents the first time TCS, traditionally an asset-light company, has brought in external private equity capital and external debt for such a massive infrastructure project.

Ambitious Scale and Location Status

This collaboration is central to TCS’s goal of becoming a premier AI-led technology services provider. The company aims to develop AI-ready data centers with a combined capacity exceeding 1 Gigawatt (GW) over the coming years.

While the financial details and scope are clear, TCS remains tightlipped regarding the specific locations for these upcoming AI data centers, noting that site identification is still in progress. The facilities are designed to be purpose-built, high-density, and liquid-cooled to efficiently handle demanding AI and non-AI workloads for hyperscalers and enterprises, aligning with India’s growing need for secure, localized digital infrastructure.

N. Chandrasekaran, Chairman of TCS, emphasized that the partnership will strengthen the company’s relationships with hyperscalers and AI companies, positioning TCS to deliver comprehensive AI solutions to its global partners and customers.