TCS Looks to Rope In TPG for $2 Billion AI Data Centre JV
India’s largest IT services company, Tata Consultancy Services (TCS), confirmed a $1 billion investment commitment from global private equity firm TPG to accelerate HyperVault, its newly created AI data centre platform. Both TCS and TPG together plan to deploy up to ₹18,000 crore (about $2 billion) over the next few years.
This partnership marks a shift in TCS’s traditionally conservative strategy. The company has long preferred asset-light operations, mostly relying on organic growth rather than acquisitions or large capital expenditure commitments. Its last major acquisition was Citigroup Global Services in 2008 for $512 million. But with AI infrastructure becoming central to digital transformation, TCS appears ready to make a long-term bet.
Why Is TCS Making This Bet Now
TCS’s plan to build 1 GW of data centre capacity was first mentioned in its second-quarter FY26 commentary. The company estimated a required investment of $6.5–7 billion to achieve this target. With TPG stepping in as a strategic partner, TCS reduces the burden of upfront investment while improving long-term returns.
TPG will invest up to ₹8,820 crore (around $1 billion) in HyperVault and is expected to hold between 27.5% and 49% equity in the venture. TCS will retain 51%, according to the company filings. HyperVault will be funded through a mix of TCS equity, TPG equity, and debt.
In his statement, TCS Chairman N Chandrasekaran said the partnership strengthens the company’s ability to build “large GW-scale AI data centres in India,” tapping into rising AI infrastructure demand. He added that the initiative also deepens collaborations with hyperscalers and AI companies while positioning TCS to deliver full-stack AI solutions to clients.
This investment is also part of a broader Tata Group trend: tapping external capital for new-age businesses. TPG previously invested $1 billion in Tata Motors’ EV unit in 2021. Earlier this year, AESC Group invested in Tata’s EV battery venture Agratas.
What HyperVault Plans to Build
HyperVault is TCS’s first concrete move toward a data-centre business. TCS is already planning a 120-MW facility in Navi Mumbai, which is expected to go live in 18 months. Over time, the joint venture aims to scale to 1 GW of capacity, aligning with India’s rapidly expanding digital infrastructure needs.
India currently has about 1.5 GW of total installed data centre capacity. Industry forecasts suggest this could exceed 10 GW by 2030. Since 2019, the Indian data centre market has already attracted nearly $94 billion in investments, highlighting the industry’s momentum.
TCS expects HyperVault to cater to large AI workloads, hyperscalers, deep-tech firms, government bodies, and enterprise clients.
During an analyst call, TCS COO Aarthi Subramanian noted that the company is building coverage across the entire AI stack - from infrastructure to applications and agentic AI layers. The broader plan aligns with TCS’s stated ambition to become the “world’s largest AI-led technology services company.”
How This Reshapes TCS’s Long-term Strategy
TCS’s move represents a significant departure from its traditional outsourcing-focused model. Serving international clients across coding, cloud, data, and support functions generated $30.18 billion in revenue last year, with only about 6% coming from the domestic market. The HyperVault initiative marks TCS’s shift toward building domestic digital infrastructure at scale.
TCS also has the financial bandwidth to support such expansion. As of September 30, the company held cash reserves of ₹1.06 trillion (around $12 billion), with total debt of ₹10,932 crore. Bringing in a partner like TPG helps balance investment requirements at a time when global hyperscalers and tech giants are also expanding aggressively into India.
Earlier this month, Google announced a $15 billion plan to develop a 1 GW AI data centre in Visakhapatnam within five years. With such moves underway, Indian, and global players are racing to build infrastructure for the next wave of AI adoption, cloud expansion, and data localisation demands.
In this backdrop, HyperVault gives TCS a foothold in a market set to grow sharply due to 5G adoption, regulatory storage requirements, cloud growth, and rising enterprise AI workloads. Mumbai and Chennai alone account for about 65% of India’s installed data centre capacity, with 536 MW and 113 MW, respectively.
TCS shares have risen 2.74% since it first signalled its data centre ambitions on October 9, closing at ₹3,145.75 on November 20.
Conclusion
TCS’s partnership with TPG marks a major strategic shift in how India’s largest IT services company is approaching the next wave of AI-led digital infrastructure. With up to ₹18,000 crore committed, HyperVault places TCS in direct competition with global hyperscalers and India’s largest conglomerates, while giving the company its first large-scale platform play beyond IT services.
As India’s data centre capacity accelerates toward multi-GW scale over the next decade, will this collaboration reshape TCS’s role in the country’s AI infrastructure landscape?
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