India’s AI infrastructure boom is fueling a surge in demand for data-centre components, with Indian manufacturers supplying cables, power systems, cooling equipment, and fibre-optic cables to power AI workloads.

Industry voices describe the capacity build-out as a tsunami, with near-daily increases in supply and rapid acceleration of capacity.

Notable beneficiaries include TD Power Systems and MTAR Technologies, which are gaining from rising demand for power units and fuel-cell system components used by major tech operators.

Fibre-optic cable producers and other equipment makers such as HFCL, TD Power Systems, and MTAR Technologies are riding a wave of demand for data-centre networks, power units, and cooling systems.

Experts say the growth requires large-scale capacity, aiming for roughly one gigawatt to meet hyperscale ambitions.

Investors acknowledge the optimism but warn valuations could be stretched, with risks from energy consumption and regulatory or land-use hurdles as projects scale.

India’s data-centre expansion is supported by US hyperscalers and Indian conglomerates like Adani and Reliance, though sector valuations remain stretched and concerns persist about energy use and project delays globally.

While investment activity remains strong, there are risks including stretched valuations and potential disruption to India’s IT services sector if AI automates routine tasks or reshapes demand.

Some operators, including Sify Infinit Spaces, anticipate IPOs as part of expanding data-centre capacity, with optimism that domestic demand will compensate for slower overseas growth.

Overall optimism for Indian data-centre development persists, aided by limited local opposition and ongoing investments in large-scale capacity.

India remains eager to participate in AI but still relies on imports for advanced semiconductors and faces concerns that generative AI could disrupt its IT-services export model by automating routine tasks.

HFCL reports its strongest-ever quarter on AI-driven demand, with rapid capacity scaling highlighted by the founder as resembling a tsunami.