After 3,300 layoffs, HCLTech says it is investing Rs 3,500 crore in AI data centres
HCLTech is venturing into the data centre business as the AI boom continues, with plans to invest Rs 3,500 crore. This move comes after the company revealed that it had cut nearly 3,300 jobs in recent months.
The AI boom is showing no signs of slowing down, with companies like OpenAI and Anthropic looking to get more compute via data centres to run AI models. Now, HCLTech, one of India’s IT majors, has announced that it is venturing into the AI data centre business with plans to invest up to Rs 3,500 crore. At the same time, the company revealed that it had cut nearly 3,300 jobs in the past three months.
During the company’s latest quarterly earnings conference, HCLTech CEO and managing director C Vijayakumar announced plans to establish AI data centres as demand is expected to nearly triple by 2030. “We will make a strategic investment of up to Rs 3,500 crores and with a potential to scale up to 50 MW capacity,” he said.
AI data centres are essential when it comes to running AI models. When you use ChatGPT or Gemini via the cloud, the AI models are run on such data centres. As such, as demand grows, companies need to get more computing power.
The HCLTech CEO pointed out that there was a need for sovereign data as government and enterprise workloads continued to increase. The IT giant also recently invested $150 million into the Indian AI startup Sarvam AI. HCLTech also has a partnership with OpenAI to use ChatGPT Entreprise internally.
The move comes in the same quarter in which HCLTech reduced its workforce by 3,292 employees, taking its total headcount to 223,889 as of June 30 from 227,181 at the end of March.
AI has changed economics of computing
Vijayakumar stated that HCLTech was already in talks with potential clients and was close to closing a deal with a customer. He said the megawatts were “just an anchor” and that the larger value lay in delivering full-stack AI services including data centres, GPUs, models and applications.
“AI has fundamentally changed the economics of computing. For us, the data centre is the foundation for delivering full-stack AI solutions, from GPUs and models to enterprise applications. This opens up a new growth vector for HCLTech,” The HCLTech CEO said.
To give you some context, the Indian IT sector has faced uncertainty due to the rise of AI tools. While critics believe that this could potentially mark the end of the road for IT services, companies like HCLTech and TCS are investing in AI as they see it as a potential new avenue for growth.
In October last year, TCS announced plans to invest around $6 billion to build 1 GW of data centre capacity over the next five to seven years. TCS is also planning to hire as many as 8,900 forward deployed engineers (FDEs) to help clients integrate AI tools.
The AI boom is showing no signs of slowing down, with companies like OpenAI and Anthropic looking to get more compute via data centres to run AI models. Now, HCLTech, one of India’s IT majors, has announced that it is venturing into the AI data centre business with plans to invest up to Rs 3,500 crore. At the same time, the company revealed that it had cut nearly 3,300 jobs in the past three months.
During the company’s latest quarterly earnings conference, HCLTech CEO and managing director C Vijayakumar announced plans to establish AI data centres as demand is expected to nearly triple by 2030. “We will make a strategic investment of up to Rs 3,500 crores and with a potential to scale up to 50 MW capacity,” he said.
AI data centres are essential when it comes to running AI models. When you use ChatGPT or Gemini via the cloud, the AI models are run on such data centres. As such, as demand grows, companies need to get more computing power.
The HCLTech CEO pointed out that there was a need for sovereign data as government and enterprise workloads continued to increase. The IT giant also recently invested $150 million into the Indian AI startup Sarvam AI. HCLTech also has a partnership with OpenAI to use ChatGPT Entreprise internally.
The move comes in the same quarter in which HCLTech reduced its workforce by 3,292 employees, taking its total headcount to 223,889 as of June 30 from 227,181 at the end of March.
AI has changed economics of computing
Vijayakumar stated that HCLTech was already in talks with potential clients and was close to closing a deal with a customer. He said the megawatts were “just an anchor” and that the larger value lay in delivering full-stack AI services including data centres, GPUs, models and applications.
“AI has fundamentally changed the economics of computing. For us, the data centre is the foundation for delivering full-stack AI solutions, from GPUs and models to enterprise applications. This opens up a new growth vector for HCLTech,” The HCLTech CEO said.
To give you some context, the Indian IT sector has faced uncertainty due to the rise of AI tools. While critics believe that this could potentially mark the end of the road for IT services, companies like HCLTech and TCS are investing in AI as they see it as a potential new avenue for growth.
In October last year, TCS announced plans to invest around $6 billion to build 1 GW of data centre capacity over the next five to seven years. TCS is also planning to hire as many as 8,900 forward deployed engineers (FDEs) to help clients integrate AI tools.
