Indian data centre infrastructure providers say the emergence of China’s low-cost artificial intelligence platform DeepSeek is expected to increase the need for more data centres rather than reduce demand.
A data centre is a facility that organizations use to house their critical applications and data.
On January 30, the government said DeepSeek, an open-source model, would soon be hosted on Indian servers to address data security and privacy concerns over the Chinese AI platform.
The Chinese company DeepSeek has been making headlines after its AI model R1 overtook ChatGPT as the top-ranked free app on Apple’s Appstore, challenging the AI dominance concentrated so far with the US firms.
“We’re very excited for India. Cheaper models for inference are the need of the hour. This will only grow data centres and make AI accessible to every Indian,” said Darshan Hiranandani, CEO of Hiranandani Group.
Anant Raj, a listed real estate company that has expanded into the data centre and AI-driven solutions space through its subsidiary Anant Raj Cloud, said that DeepSeek is expected to provide a major opportunity for growth.
“The launch of DeepSeek is expected to drive further the surge in demand for data centres in India. AI-driven models like DeepSeek require vast computing power and storage capabilities, increasing the need for high-performance, scalable, and energy-efficient data centres,” said Amit Sarin, Managing Director, Anant Raj Limited.
India holds only a 1% share of global data centres
Regarding data centre demand in India, it’s important to note that despite accounting for 28% of global data generation, India currently holds only a 1% share of global data centres. This highlights the immense potential for expansion in this sector, he explained.
As India cements its position as a global technology hub, businesses will require a robust infrastructure to support AI applications, leading to greater investments in hyperscale and edge data centres. Additionally, he added that regulatory frameworks around data localization and the expansion of cloud services will further accelerate the demand for secure, cutting-edge data centre facilities nationwide.
Affordable AI tools will boost data generation, driving demand for data centres.
With global data generation growing unprecedentedly, AI systems are significant consumers and producers of this data. As AI tools become more affordable, the volume of data processed will rise, further fueling the need for advanced data centres.
“This trend aligns with our business model, positioning us to benefit from the increasing demand,” Sarin said.
Jatin Shah, Chief Strategy Officer, Colliers India, concurred that DeepSeek will boost data centres, improve efficiency, reduce costs, and enhance overall performance. DeepSeek’s AI-powered platform is designed to scale with growing data centre demand, ensuring that resources are optimized and performance is maintained.
DeepSeek has revolutionized the artificial intelligence (AI) space by significantly reducing the costs of operating a data centre. Shrinivas Rao, FRICS, CEO of Vestian, said the Indian data centre industry may witness the rise of energy-efficient data centre designs to minimize operating costs as DeepSeek works on a balanced loading approach.
A report by CBRE says India’s data centre (DC) capacity is projected to reach about 2,070 megawatts (MW) by the end of 2025. The country’s current data centre capacity stands at about 1,255 MW and is estimated to expand to around 1,600 MW by the end of 2024.