Tata Consultancy Services Ltd. has raised $1 billion from TPG for its AI data centre business called HyperVault, as part of its endeavour to become the world’s largest AI-led IT services company.
The TCS-TPG deal, according to the Mumbai-based company, will help drive stronger returns to shareholders, reduce capital outlay and create long-term value for the AI data centre platform.
The San Francisco-based private equity firm and India’s largest IT services firm will invest in HyperVault a total of ₹18,000 crore (about $2 billion) in a mix of equity and debt over the next few years, according to a statement on Thursday. While TCS will retain a majority stake of 51% in the joint venture, TPG will invest up to ₹8,820 crore for a 27.5-49% stake.
The TCS-TPG deal to build large, gigawatt-scale AI data centres in India “will further strengthen our partnership with hyperscalers and AI companies”, TCS Chairman N. Chandrasekaran said in the statement. “With this capability, TCS is now uniquely positioned to deliver complete AI solutions for its customers and partners.”
TCS AI Plans
The TCS-TPG deal comes five weeks after the Tata Group company announced launch of a wholly owned subsidiary to build “world-class AI infrastructure” starting with a 1 GW AI data centre in India at an investment of $6.5 billion. That matches India’s total installed data-centre capacity at present.
“We have set a target of 1 GW. We will be doing it in phases,” Krithi Krithivasan, chief executive officer at India’s IT bellwether said during an investor call after the company announced its September quarter earnings. “We expect to do 1 GW in 5-7 years.”
The TCS-TPG deal is significant, for it signals a break from cost-effective outsourcing to the capital-intensive business of AI compute power. That will allow India’s IT bellwether to offer end-to-end enterprise AI solutions—from training large language models (LLMs) and running Generative AI workloads.
“Data centres are a multi-faceted asset class and sit at the intersection of green energy infrastructure, technology and real estate,” TPG Chairman Jim Coulter said. “We look forward to bringing TPG’s sectoral expertise across these asset classes and working together with TCS…in a climate-positive manner.”
The TCS-TPG deal is being facilitated through TPG Rise Climate, which had also invested in Tata Motors Group’s EV business.
AI data centres in India
To be sure, TCS’ planned 1 GW AI data centre matches the current installed capacity in India, indicating that the industry is still in its infancy in a country that is home to the biggest internet population outside of China.
India’s data-centre market is currently valued at $4-8 billion and is expected to grow at a compound annual growth rate of 15-20% until the end of the decade.
According to a CBRE report, India’s total data centre capacity has crossed 1.5 GW, with Mumbai accounting for 53% of the operational stock as of September 2025. ICRA Ltd. expects it to double to around 2.5 GW by 2027-28. requiring an investment of nearly ₹90,000 crore. Colliers projects an even sharper growth to 3.5-4.5 GW by 2030, at a total investment of $25-30 billion.
On 14 October, Google announced its plans to India’s largest AI data centre in Visakhapatnam, as part of the Gemini creator’s $15-billion push into India’s AI landscape.
ALSO READ | Inside TCS’s mega AI plans
On Thursday, TCS shares fell 0.05% to ₹3145.75 apiece on the BSE even as the benchmark Sensex ended the day 0.52% higher at 85,632.68 points.
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