Telangana aims for 5 GW data centre capacity and $30B AI investment by 2029
Telangana's IT minister announced a target of 5 GW data centre capacity by 2029, with potential investments of around $30 billion in AI and digital infrastructure. The statement came at the inauguration of Microsoft's India South Central cloud region, the company's fourth in India. The state currently has over 2.5 GW of hyperscale and AI infrastructure capacity operational or under development.
Telangana's existing hyperscale and AI infrastructure already exceeds 2.5 GW of capacity, with new projects shifting toward AI-scale computing, high-density GPUs and advanced cooling. Microsoft's new India South Central region, its fourth in the country, uses a three-zone architecture and operates with effectively zero water consumption for cooling, supported by local groundwater recharge and rainwater harvesting efforts.
The state's Hyderabad Global AI Strategy encompasses AI City, a Global AI Innovation Hub, AIKAM and TGDeX, spanning compute, data infrastructure, research and commercialisation. Microsoft's Data Center Academy, a 600-hour programme with local partners, prepares students for datacentre operations, while community skilling has trained hundreds. The company aims to equip 20 million Indians with AI skills by 2030, with over 10 million already reached.
This expansion could reshape Hyderabad's economic landscape, potentially creating thousands of skilled jobs in datacentre operations, AI development and related services. Local communities may benefit from skilling programmes, though the environmental demands of large-scale computing infrastructure remain a consideration. Businesses across India and the Global South could gain access to more resilient, AI-ready cloud capacity, while smaller enterprises may face pressure to adopt AI tools to remain competitive. The balance between rapid infrastructure growth and sustainable resource use will likely shape the region's long-term development.