The rapid growth of data centres can be attributed to a variety of factors and trends in the global market. Accor­d­ing to Gartner estimates, over 95 per cent of new digital workloads will be deployed on cloud-native platforms by 2025, up from 30 per cent in 2021. Data centres are expected to consume 20 per cent of the wo­rld’s power supply in the same time period. Further, the increasing use of streaming and internet usage has led to an increase in demand for more data centres. The roll-out of 5G has also propelled demand. In the future, investments in the data centre market are anticipated to reach $200 billion by 2025.

However, India still has a significant way to go before achieving complete data centre transformation. As of 2023, India has over 151 data centres, while countries such as Germany, China and the UK have over 532, 448 and 517 data centres respectively. Furthermore, the US has the highest number of data centres in the world, standing at over 5,375.

Additionally, approximately 87 per cent of corporate executives plan to invest in more sustainable technologies. Large co-­lo­ca­tion and wholesale data centre pro­viders are also planning to accelerate the use of ar­tificial intelligence (AI) in high-density zones at their facilities. The hyperscale data centre market is projected to gr­ow at a compound annual growth rate (CAGR) of 3.38 per cent between 2021 and 2026.

Growth of data centres in India

Digital India initiatives have transformed India into one of the fastest growing data centre markets in the world. This growth can be attributed to a variety of other factors, including increasing internet and mobile penetration, and data localisation policies. Meanwhile, according to a NASSCOM report, India’s share in the global data centre market is estimated to reach 2.3 per cent by 2025, with the co-location market expected to grow at a CAGR of 16 per cent and reach $1.4 billion.

Leveraging AI and ML

AI and machine learning (ML) are requir­ed to increase energy efficiency and susta­inability, improve asset performance management, enhance customer relationship management and security, and bolster capacity management and planning in the data centre space.

India’s vision for “Make AI in India” and “Make AI work for India” is aimed at leveraging AI for a variety of use cases. Keeping AI at the forefront of these digital innovations is expected to help drive data centre transformation in India. Some of the use cases for AI in data centres are:

  • Improving agricultural outcomes by bu­ilding partnerships with private and government bodies to implement AI-based solutions.
  • Developing a regional language library.
  • Mentoring Indian start-ups by developing AI-based solutions to improve economic productivity.
  • Using AI in healthcare. One example of this would be creating architecture for buil­ding electronic medical records using blockchain.
  • Initiating reforms in the Indian judiciary by leveraging AI for pending court cases.

Generative AI

Another popular use case for AI in data centres is the use of generative AI. Gene­rative AI workloads have several implications for data centre architecture, and can add significant value to AI operations. Ge­nerative AI also helps in data centre management and provides enhanced security. Additionally, it drives innovation in the data centre space by pushing new technologies.

Generative AI presents new opportunities across a range of industries, including finance, energy, manufacturing, healthcare and retail. According to a recent study, 38 per cent of companies in the international market are implementing generative AI to improve customer experience, while 26 per cent are using it to boost revenue growth and 17 per cent are using it to reduce costs.


AI and automation are expected to help modern data centres achieve their sustainability goals. Currently, data centres acc­ount for only 4 per cent of the total greenhouse emissions worldwide. How­ever, as the demand for data continues to grow, it is important to find ways to make data centres more efficient and sustainable.

One way to achieve this is to automate various processes using AI-based robots. This can help improve data centre effici­ency by reducing the need for human in­tervention and automating repetitive tasks. Additionally, creating a digital twin of a data centre with the assistance of AI and ML can help identify and address potential inefficiencies.

According to another Gartner report, half of all cloud data centres will deploy advanced robots with AI and ML capabilities by 2025. This is expected to result in 30 per cent higher operational efficiency.

The way ahead

Data centre providers are currently focu­sed on maintaining productivity by enhancing workforce solutions to deliver optimal productivity levels at all times. The next step is to modernise data centres, which involves modernising infrastructure technology, op­timising the speed of delivery and the scale, and enabling the on-demand business.

Based on a presentation by Rishi Khanna, Partner, Jamaluddin Raazi, Director, and Mukesh Singh, Manager, EY