HCLTech, India’s third-largest IT services exporter, has formally announced a major expansion into full-stack artificial intelligence infrastructure by partnering with domestic AI startup Sarvam AI and the Government of Odisha to build its first AI data center. The project involves a massive capital outlay of 14,257 crore rupees (approximately $1.48 billion), backed by direct financial support and policy incentives from the state government. Situated in the upcoming Odisha Sovereign AI Park in Bhubaneswar, the facility aims to anchor India’s sovereign computing capabilities while expanding the domestic developer ecosystem.
The announcement comes shortly after HCLTech acquired a 10.5 percent strategic stake in Sarvam AI for $150 million during the startup’s Series B funding round. By combining HCLTech’s enterprise cloud and GPU infrastructure services with Sarvam’s homegrown foundation models, the joint initiative will deliver specialized, multilingual artificial intelligence solutions tailored for both state-owned enterprises and private corporations. The move signals a broader strategic pivot among top Indian IT exporters seeking to capture high-margin AI compute workloads as traditional software outsourcing experiences slower growth.
Infrastructure Scale and the Sovereign Compute Push
The planned AI data center is structured to provide high-performance compute clusters specifically engineered for training and inferencing complex machine learning models. Beyond raw hardware hosting, the facility will leverage Sarvam’s specialized foundation models to support localized, sector-specific applications ranging from automated public governance systems to private enterprise workflows. The setup is designed to address stringent data localization mandates, ensuring that critical domestic data remains within national borders while operating on locally governed compute infrastructure.
Leadership at both organizations emphasized that the Bhubaneswar development represents a vital step toward technological self-reliance under national digital initiatives. HCLTech Chairperson Roshni Nadar Malhotra noted that the firm aims to act as a primary enabler of India’s sovereign AI ecosystem across the entire technology value chain. Concurrently, Sarvam Co-founder Pratyush Kumar highlighted that pairing high-performance hardware with native Indian language models will democratize access to advanced generative capabilities for public institutions and domestic enterprises alike.
Regional Employment and the Bhubaneswar Technology Hub
Alongside the flagship data center investment, HCLTech has executed a separate Memorandum of Understanding with the Odisha government to establish a dedicated Global Technology Center in Bhubaneswar. Set to become operational by 2028, this state-of-the-art facility will house 5,000 technology professionals focused on engineering and delivering next-generation digital services for global enterprise clients. The dual projects reflect Odisha’s aggressive push to transform its capital city into a primary information technology and deep-tech destination in eastern India.
The upcoming technology hub will work in close operational alignment with the adjacent Sovereign AI Park, creating a unified innovation cluster for AI development, testing, and deployment. HCLTech plans to collaborate with local universities and technical institutions to build a specialized talent pipeline in machine learning and cloud architecture. This regional expansion will generate significant direct and indirect employment, adding to HCLTech’s existing nationwide workforce of over 170,000 employees spread across major tech campuses such as Noida, Bengaluru, and Hyderabad.
Industry Diversification Beyond Traditional IT Outsourcing
HCLTech’s multi-billion-dollar commitment highlights a pivotal shift across India’s $315 billion IT services sector, where industry leaders are rapidly building physical data center assets to capitalize on surging cloud and AI demand. With traditional IT outsourcing revenues facing macroeconomic headwinds and modest growth guidance, top-tier vendors are expanding into GPU hosting, model customization, and full-stack enterprise solutions. HCLTech Chief Executive Officer C Vijayakumar explained that controlling the full stack—from underlying hardware and foundation models to custom enterprise software—unlocks significantly higher value creation than traditional maintenance contracts.
This capital deployment mirrors similar moves across the domestic tech landscape, including Tata Consultancy Services’ recent $2 billion investment to develop AI data centers in partnership with private equity firm TPG. India’s combination of low operating costs, expanding internet user base, and critical infrastructure needs has positioned the country as an attractive destination for high-density compute deployments. As enterprise adoption of generative tools accelerates globally, Indian IT majors are betting that sovereign AI infrastructure will become the central pillar of their long-term growth strategies.
