The Adani Group is advancing its $4 billion plan to expand its data centre business in response to surging demand from global technology giants. This move aims to capitalize on the booming demand for data storage and processing.

At the forefront of this expansion is Adani ConneX Pvt. Ltd., a joint venture between Adani Enterprises Ltd. and Virginia-based EdgeConneX. Currently, Adani ConneX operates with a data centre capacity of 17 megawatts (MW) and manages another 210 MW that is in various stages of construction. The Adani Group plans to accelerate its data centre capacity growth to 1 to 1.5 gigawatts (GW) within the next one to two years, a considerable acceleration from its original five-year timeline, according to a report by Mint.

To meet its target, the Adani Group is preparing to invest an additional $4 billion. The estimated cost per megawatt of data centre capacity stands at around Rs 40 crore, as stated by reports.

Industry insiders have noted that the surge in demand for data centre services has been so remarkable that the Adani Group may consider slowing down investments in other sectors to prioritize the data centre business. This strategic shift is expected to pave the way for the group to meet the rapidly increasing demand from tech giants, as they look to store and manage data in India.

The demand for data centre services has skyrocketed in recent years, with the average order size for such services escalating from 5-10 MW two years ago to a staggering 50-100 MW today. This growth reflects the increasing reliance on data storage and cloud services by companies in the digital era. Currently, Adani Group holds a modest 2.5% share of India’s data centre market, but this figure is poised for growth as the market itself is projected to expand from its present capacity of 700 MW to an estimated 4 GW by FY30.

With a robust order visibility of 1.5-2 GW, Adani ConneX has the potential to drastically increase its market share. Achieving a data centre capacity of 1 GW could propel Adani ConneX’s market share to approximately 25%.

This expansion will have a ripple effect on the Adani Group’s power generation sector, which is operated by Adani Power Ltd. and Adani Green Energy Ltd. The data centre business, known for its substantial power consumption, is expected to boost the group’s power generation revenue. Data centres, especially those driven by Artificial Intelligence (AI) services from major companies like WhatsApp, Google, and Facebook, demand vast computational resources, consuming eight to twelve times more power than standard computational requirements.

The data centre market in India is increasingly becoming a hotbed of activity, with multiple players vying for dominance. Adani Group’s expansion plans come at a time when the country’s data centre capacity is set for unprecedented growth. As organizations increasingly rely on cloud computing, AI, and data analytics, the demand for data storage and processing capabilities continues to soar.

Currently, the Indian data centre market stands at approximately 700 MW, but it is forecasted to expand to a massive 4 GW by FY30, presenting an opportunity for growth. By accelerating its expansion timeline, Adani ConneX is positioning itself to capture a share of this growing market.

As of the time of this report, the Adani Group has not issued an official comment on the expansion plans.

Story first published: Saturday, September 28, 2024, 13:19 [IST]