India is at a pivotal point in its journey toward harnessing artificial intelligence (AI) for economic growth and technological security. With the exponential growth in AI compute demand — which has increased by a factor of 350 million since 2011 — the country recognizes the critical need for a robust and diverse computing infrastructure.
Artificial intelligence requires significant computational resources, and unlike data and models, compute is a scarce commodity. Globally, data center capacity is expected to triple by 2030, driven predominantly by AI, which will account for about 70 percent of this expansion. However, this growth poses challenges, such as the need for vast real estate, increased energy consumption (projected to rise by 165 percent), and high-end technological inputs.
India’s strategy involves a multi-pronged approach. The country’s data center growth has a Compound Annual Growth Rate of 24 percent since 2019. Initiatives like the IndiaAI Mission have made around 32,000 GPUs accessible, including plans for decentralizing micro data centers that optimize space, energy, and costs. Supercomputing resources are allocated under the National Supercomputing Mission, supporting academic and innovative research. Additionally, indigenous AI developments, such as CPU-based models, highlight the importance of flexible compute solutions as demand shifts from training to inference.
Globally, different countries adopt various models. The US pursues a market-driven approach supported by private companies like NVIDIA, Dell, and Amazon Web Services, which are investing heavily in AI factories—dedicated data centers for AI workloads. China advances with state-led initiatives and private partnerships, exemplified by underwater data centers that increase energy efficiency and help overcome land constraints. The European Union emphasizes a public-institutional framework through research hubs like EuroHPC, aiming to foster innovation in key sectors.
For India, striking a balance between scale, efficiency, and broad access is vital. The nation’s evolving infrastructure must align with the demand shift towards inference and edge computing, especially for industries such as healthcare, manufacturing, and automotive. Ensuring low barriers for startups and SMEs is essential to unlock innovation across sectors and democratize AI benefits.
Developing a comprehensive policy that accommodates technological, economic, and geopolitical realities is crucial. This involves leveraging private investment, promoting decentralization, and maintaining government-supported central infrastructure. As AI becomes integral to national progress, India’s compute strategy will shape its future in AI-driven innovation.
