India’s rising need for AI infrastructure: Are we well equipped?

The advent of Artificial Intelligence (AI) and Generative AI (GenAI) has been paradigm-shifting for various sectors, transforming how data is processed, analysed, and utilised. India has embraced this revolution with open arms, with an adoption rate of nearly 48% across key sectors between 2017 and 2023.
 
A variety of factors have contributed to this adoption – the government's push for digital transformation through initiatives like Digital India, the rise of tech-savvy consumers, and the increasing penetration of smartphones and internet connectivity – and there are no signs of slowing down. However, the big question remains: Is India equipped to meet this demand?
 
The Growing Demand for High Computing Capacities
 
India is home to more than 25,000 technology startups, making it the world's third-largest tech startup ecosystem. India is also witnessing a surge in cloud adoption. Cloud-native technologies are the new normal for Indian enterprises. Moreover, banks have been leading the migration to cloud services – Axis Bank recently announced plans to migrate 70% of their on-premises infrastructure to the cloud.
 
Despite the high rates of adoption, India is sorely lagging in building data centre capacity. India generates approximately 20% of global data, however, in terms of data centre capacity, it sits with a share of a measly 3%, as per reports.
 
This divide only highlights the critical juncture our nation stands at – there’s a dire need to scale current data processing capabilities to meet the growing needs, and these demands are only going to get heavier and more complex in the coming years. Throw in AI and generative AI technologies in the mix, and there’s also a need for significant computing power.
 
The industry has understood the potential India has. Over the last few years, the Indian data centre sector has attracted investments of over $40 billion between 2018 and 2023. The Indian government too realises the critical nature of this technology infrastructure in nation-building, with the cabinet approving over ₹10,300 crore for the INDIAai Mission.
 
The mission aims to empower AI startups and expand compute infrastructure access across the country. The investment is indicative of the government's commitment to fostering an environment that encourages AI innovation and ensures that startups have the necessary resources to thrive.
 
The Path Forward
 
While these investments and initiatives are steps in the right direction, it’s important to understand that building the required infrastructure involves far more than just financial investment. What also needs to be tackled are challenges related to energy consumption, technological expertise, and regulatory frameworks.
 
To effectively meet the rising need for AI infrastructure, India must adopt a strategic approach that includes:
 
Addressing the talent gap

Execute skill development initiatives in the form of specialized training programs and courses in collaboration between industry, academia, and the government. This can help attract and retain skilled professionals in the data centre sector.
 
Emphasis on sustainability

To address the DC industry’s carbon-hungry nature, businesses should align with sustainable practices to mitigate overall environmental impact. This can be in the form of adopting green data centre practices, implementing measures to reduce energy consumption and emissions, and leveraging renewable energy sources for its operations.
 
Colocation as a catalyst

Colocation allows companies to access cutting-edge technologies and expertise from specialised providers, aligning with the evolving needs of the digital economy. Moreover, colocation facilities can be designed to incorporate green data centre practices, such as using renewable energy sources, efficient cooling systems, and sustainable computing, to reduce the carbon footprint of data centres.
 
Additional government support

Seamless government support is essential to create a conducive environment for expansion. This can be achieved by integrating data centres into the Essential Services Maintenance Act (ESMA), establishing Data Center Facilitation Units (DCFU), and creating Data Center Economic Zones. Additionally, the government should introduce a specialised category code for data centres in the National Building Code of India, incentivise using renewable energy and sourcing components from Indian manufacturing units. Furthermore, a comprehensive data centre policy should be formulated to provide a clear framework for the industry.
 
India stands at a crucial juncture in its AI journey. The rising demand for AI-driven solutions presents both opportunities and challenges. While significant strides have been made in building AI infrastructure, a concerted and sustained effort is required to overcome existing hurdles. By fostering a conducive environment for data centres, India can position itself as a potent influence in the digital economy, helping drive innovation and economic growth.

Anil Pawar

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Anil Pawar, Chief AI Officer, Yotta Data Services