Following a landmark year for investments in 2025, India's data centre sector is poised for an even more aggressive growth trajectory in 2026. Industry executives and analysts project a sharp 20% increase in capital inflow next year, fueled by an insatiable global and domestic demand for artificial intelligence (AI) computing infrastructure and sovereign cloud solutions.
The Investment Surge and Key Players
The momentum from a record-breaking 2025 is expected to catapult India's total operational data centre capacity to 2 gigawatts (GW) by the end of 2026. This expansion will be powered by a mix of deep-pocketed global technology firms and ambitious homegrown companies. Market estimates indicate that establishing 1 GW of new data centre capacity necessitates a colossal investment ranging between ₹60,000 to ₹90,000 crore ($7-10 billion).
Leading the charge from the domestic front is the Hiranandani Group-backed Yotta Data Services. Its CEO, Sunil Gupta, revealed plans to scale investments in 2026 to activate nearly 500 megawatts (MW) of dedicated AI factory capacity. While the exact fundraising figure remains undisclosed, Gupta confirmed the pursuit of "large funding" to meet the high costs of construction.
In a significant move, Chennai-based Sify Infinit Spaces filed draft papers with SEBI in October 2025 to raise up to ₹3,700 crore. A substantial portion, ₹2,500 crore, is earmarked for data centre expansion, with a long-term ambition to invest $5 billion by 2030.
Global Giants and Green Energy Join the Fray
The local players will be far from alone. The world's leading AI startup, OpenAI, is anticipated to make a major foray into the Indian market. With CEO Sam Altman identifying India as its largest global market, OpenAI is expected to invest in a massive 1GW data centre to support its ChatGPT-led services.
Furthermore, the sector's enormous power requirements are attracting top private renewable energy companies. Analysts point to planned investments of up to $30 billion in 2026 alone from green energy firms aiming to power this digital infrastructure boom sustainably.
The commitment from Big Tech is already monumental. Microsoft has pledged $20.5 billion by 2030, Google plans a $15 billion, 1GW data centre in Visakhapatnam, and Amazon has committed $15.3 billion for its Indian cloud infrastructure. Indian corporate titans are also all-in: Tata Consultancy Services has a $7 billion plan, Larsen & Toubro aims for 300MW capacity with a $3 billion outlay, and Reliance Industries announced an $11 billion, 1GW project through its JV, Digital Connexion.
Sovereign Cloud and the Shift from Pledges to Construction
Beyond AI, a critical driver for 2026 will be the rising demand for sovereign cloud platforms, driven by evolving data privacy regulations and government initiatives. Naresh Singh, a senior director analyst at Gartner, emphasized that these requirements are expected to propel growth through 2026.
Sanchit Vir Gogia, CEO of Greyhound Research, notes a pivotal shift in investment behaviour for the coming year. "The capital of investment will not retreat; instead, it will sink deeper into execution," he said. Gogia explained that 2026 will see money moving from announcement headlines to on-ground spending—land acquisitions will accelerate, and campuses will move from blueprints to active construction. This phase involves steady capital absorption in substations, cooling systems, and long build schedules, making actual spending likely to increase by over 20%.
Consultancy firm Gartner forecasts a 20% year-on-year global increase in IT infrastructure spending, reaching $176 billion in 2026. Echoing the bullish sentiment, venture capital firm Avendus predicts India's data centres will attract on-ground investments of at least $25 billion in 2026 itself, a figure higher than any previous year.
As India solidifies its position on the global data centre map, the confluence of AI demand, hyperscaler expansion, and sovereign cloud mandates is creating an investment supercycle, setting the stage for 2026 to be a year of unprecedented build-out and technological foundation-laying.
