India’s information technology services industry is moving beyond its traditional role as a software and outsourcing powerhouse, with leading firms increasingly stepping into the physical infrastructure needed to support artificial intelligence at scale.
Tata Consultancy Services (TCS) in its Q4 earnings call said its Hyperworld business had made “significant progress” in building AI infrastructure capacity. The company said this includes customer commitments, land parcel finalisation and partnership agreements, as it works towards a one-gigawatt capacity buildout.
TCS said customer demand is now converging around large anchor AI workloads in the 100 to 200 megawatt range per customer, signalling a shift from pilot AI projects to large-scale compute infrastructure.
The latest infrastructure push follows TCS’s earlier announcement that OpenAI had signed up as a customer for its data-centre business, with an initial 100 MW capacity plan and an option to scale to 1 GW in India.
Industry Shift
Further, HCLTech in its Q3 earnings press conference said that the company is seeing demand rising in areas such as robotics, AI factories, data centres and semiconductor engineering. “We see continued momentum in AI-powered solutions like physical AI, which is robotics, AI factory, custom silicon engineering for edge inferencing chips,” management said.
It also said spending is increasingly moving away from traditional discretionary technology areas towards foundational AI infrastructure. “There is so much Capex investments going into data centres,” management said, adding that professional services linked to robotics, physical AI and edge inferencing silicon are seeing strong momentum.
This reflects a wider change in the Indian IT industry’s business model. For years, firms mainly focused on software development, cloud migration and digital transformation.
Additionally, Infosys has stepped up hiring and capability building around AI-ready delivery systems. Wipro, meanwhile, has continued expanding its focus on infrastructure services, cloud platforms, data analytics and AI operations.
Growth outlook
Industry experts say this is where the next phase of growth lies. “Physical AI could become a meaningful new revenue stream for Indian IT services firms, potentially adding 8–12% incremental revenue over the next two to three years. Data centres, robotics integration, edge silicon engineering and AI factory services are where the next large deal cycles and margin expansion opportunities will emerge,” said an analyst at a domestic broking firm.
According to real estate consultancy firm Vestian, the country’s data-centre market, valued at $10 billion in 2025, is expected to more than double to $22 billion by 2030.
Installed capacity currently stands at 1.4-1.6 GW, with more than 700 MW under construction and an additional 1-1.2 GW in planned capacity.