In near future, India could emerge as a key market for data centers. It could face competition from countries such as Malaysia and Vietnam.

It is estimated that this sector would attract a capital investment of $100 billion in this region over the next five years. There are some factors to spur this growth — strong growth of data, the rise of AI, cloud computing and digitalization.

Indian government is looking to subsidize the setting up of data centers to avail of the AI boom. There should be ready infrastructure to avail of computing power for startups, small entities and research workers. AI system depends on compute (computing capacity), algorithmic innovations and datasets.

The lower costs make the Asia-Pacific markets attractive for setting up such infrastructure. India’s current leased data center capacity is 1-3 GW. It is the highest in the emerging markets. Malaysia may overtake India, though India has an edge with strict data sovereignty requirements.

India is already home for Big Tech data centers of companies such as Microsoft. Google and Amazon.

India will face competition from both emerging markets and developed markets. The government in India should create an enabling environment.

Johor Bahru in Malaysia has become destination for new data centers.

It is a fact that operators in established market face lower operational risk than that faced by them in emerging markets.

India is promoting the setting up of semiconductor industry in India. It is going to establish an infrastructure of 10,000 GPUs. There would be public-private partnership with 50 per cent viability funding. The private partner will add more computing power if the GPUs price come down.