Indian data centre operator Sify Infinit Spaces bets on AI boom but wary of bubble

Sify Infinit Spaces, set to become India's first listed data centre operator, sees AI driving demand for computing power but is tempering future investments to avoid over-exposure to a potential bubble, its chief executive said.

The surge in artificial intelligence technologies, which require massive computing power, has spurred unprecedented growth in data centres worldwide, including India. But Sify Infinit will keep expansion "responsible and calculated" to ensure it matches sustainable demand, CEO Sharad Agarwal told Reuters in an interview late November.

The company, whose parent Sify Technologies was among India's first private internet providers and a key player in the early internet boom, now aims to diversify beyond hyperscalers - large cloud service providers - by expanding its client base to banks, financial services, ecommerce, and media firms.


"We've seen the dot-com bubble, we've seen the subprime crisis, and we have seen quite a few cycles in the past. We are able (to cut) through the reality and 'bubble-ness' of a technological development," Agarwal said.

He said AI is not a technology bubble, but warned that herd mentality could spur overbuilding and create a capacity glut.

India's data centre capacity is expected to more than triple to 4.7 gigawatt by 2030, from 1.3 GW in April 2025, driven by rising cloud adoption and AI workloads, according to market research firm Mordor Intelligence.

The Kotak Private Equity-backed company, which runs 14 data centres across India and has 11 more under development, had filed draft papers in October for a Rs 37 billion ($410.87 million) initial public offering.

Its projects have two- to three-year lead times, which gives the company room to adjust if sentiment cools, Agarwal said.

Hyperscalers such as Alphabet, Amazon and Microsoft still dominate data-capacity demand, but edge data centres, or smaller, local hubs, are gaining traction, he said, as streaming and entertainment consumption grows in non-metro cities.

Sify has begun building an edge data centre in the eastern port city of Visakhapatnam. The city has recently drawn investments from Reliance, Adani, and Google.

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