L&T's Strategic $1.2 Billion Investment in Data Centres to Compete with Industry Titans
In a bold move to secure its position in India's rapidly expanding artificial intelligence infrastructure landscape, engineering giant Larsen & Toubro Ltd has announced a substantial $1.2 billion investment in developing data centres. The company is strategically positioning itself to compete directly with established conglomerates including the Tata Group, Adani Group, and Reliance Industries in this capital-intensive sector.
End-to-End Ownership: The Core Competitive Advantage
L&T's approach centers on maintaining complete control over every aspect of its data centre operations. According to Prashant Jain, head of corporate centre at L&T, this end-to-end ownership model—encompassing land acquisition, physical infrastructure development, and server procurement—enables the company to offer competitively priced services to clients. "We have the full stack to be a digital infrastructure provider, which helps in reaching out to large enterprises," Jain emphasized in an interview with Mint.
The company recently commenced construction on a new 40-megawatt data centre facility in Navi Mumbai, Maharashtra. This development represents a crucial component of L&T's broader strategy to expand its data centre capacity from the current 32MW to an ambitious 200MW by 2030.
Rebranding and Strategic Partnerships
In November 2025, L&T rebranded its cloud and data centre business as Vyoma, moving away from the previous L&T-Cloudfiniti identity. Seema Ambastha, chief executive of the entity, revealed that the company might allocate between $2.5 billion and $3 billion over the next five years to achieve a 300MW data centre capacity.
L&T is leveraging existing relationships through its technology outsourcing subsidiaries, LTIMindtree and L&T Technology Services (LTTS), to attract enterprise clients to Vyoma. Additionally, the company acquired a 21% stake in E2E Networks, a domestic IT infrastructure firm specializing in servers for both general-purpose and AI-focused data centres. This strategic investment provides L&T with favorable server acquisition costs for its own facilities.
Sustainability and Renewable Energy Targets
Environmental considerations form a significant part of L&T's data centre strategy. The company aims to power 75% of its data centre operations with renewable energy. Jain indicated that L&T is evaluating whether to develop its own renewable energy plants or collaborate with third-party power producers to meet this sustainability goal.
Competitive Landscape: How Rivals Are Responding
L&T's $1.2 billion investment appears relatively conservative when compared to the massive commitments made by its competitors:
- Tata Consultancy Services announced plans to construct a 1-gigawatt data centre with a total outlay of $6.5 billion, securing $1 billion in funding from US asset manager TPG for green energy initiatives.
- Adani Group entered a partnership with Google, co-investing $5 billion in a $15-billion AI data centre project, with commitments to operate entirely on green energy.
- Reliance Industries, through a joint venture with Brookfield Asset Management and Digital Realty, is developing an $11-billion, 1GW data centre scheduled for completion by 2030, also pledging full reliance on renewable energy sources.
Analyst Perspectives on Conglomerate Strategies
Industry experts recognize the strategic logic behind L&T's approach. Naresh Singh, senior director analyst at Gartner, noted: "Data centres represent a massive opportunity today, and require vast investments in land, power and other key resources—with the knowhow and comfort of working with government bodies. For the top conglomerates, this is their familiar ground."
Jayanth Kolla, partner at Convergence Catalyst, highlighted the importance of execution capabilities: "Much will depend upon how efficient a conventional conglomerate is in executing a digital-native business that requires vision. For L&T, execution will be key."
Analysts also pointed out that while Adani faces challenges in acquiring technology services experience, both Tata and L&T benefit from existing expertise through their technology outsourcing subsidiaries. Reliance may find advantages through its investments in artificial intelligence via Reliance Intelligence.
As global demand for AI infrastructure accelerates and nations prioritize domestic data centre development, L&T's billion-dollar bet represents a calculated effort to transform its engineering and construction expertise into competitive advantage in the digital infrastructure arena. The company's success will depend on its ability to execute its vertically integrated model while navigating the intense competition from India's most powerful corporate groups.
