TCS, TPG Tie Up For Rs 18,000-Crore AI Data Centre Push

Tata Consultancy Services Ltd. on Thursday announced a partnership with American private equity firm TPG for its artificial intelligence data centre business, HyperVault.

HyperVault will be funded through a mix of equity from TCS and TPG, and debt. The two companies will commit to invest up to Rs 18,000 crore over the next few years.

Out of the total commitment of up to Rs 18,000 crore, TPG will invest up to Rs 8,820 crore or $1 billion.

TPG Terabyte will invest in the proportion of 51:49 respectively of their commitment via compulsorily convertible preference shares and TPG Terabyte is envisaged to have final shareholding between 27.5% and 49% in HyperVault, as per deal details announced in a stock exchange filing.

TCS will appoint the majority of the directors on the board of HyperVault, with TPG Terabyte having the right to appoint up to two directors subject to customary fall away thresholds.

"Bringing in TPG as a strategic investment partner will help TCS drive stronger returns to its shareholders, reduce its capital outlay, and create long-term value for the data centre platform," a statement said.

The investment will support HyperVault’s GW-scale AI-ready infrastructure build and aligns with TCS’ plan to create AI-ready data centres with capacity in excess of a GW over the next few years, it added.

With AI demand surging, AI-data centers play a crucial role by providing the necessary infrastructure to hyperscalers, AI companies, private enterprises and the public sector, for hosting their compute hardware, high-speed storage, and low-latency networks needed to run real-time, large-scale AI models and applications across industries.

India currently has a data center capacity of about 1.5 GW which is expected to exceed 10GW by 2030.

Shares of TCS settled flaty at Rs 3145.75 apiece on the BSE, ahead of the announcement, compared to a 0.5% rise in the benchmark Sensex.