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India's AI Boom: Why 51% of Firms Are Rushing to Build Data Centers

Indian companies are racing to build new data center capacity as AI adoption accelerates across the country. A new Cisco report shows that over half of Indian firms plan to construct new data centers within the next year to handle growing AI workloads. However, security remains a major concern with only 37% of organizations properly securing their AI deployments. The report warns that companies without proper infrastructure planning risk accumulating significant technical debt that could impact their competitive position.

Key Points: Over Half of Indian Companies Building New Data Centers for AI

  • Over half of Indian companies expect AI workloads to grow by more than 50% in 3-5 years
  • 91% of Indian organizations are deploying autonomous AI agents despite security gaps
  • Only 37% of Indian firms can properly secure their AI agent deployments
  • 45% of companies risk accumulating technical debt from poor AI infrastructure planning
2 min read

Over 50 pc of Indian firms to build new data centre capacity in 1 year as AI workloads grow

Cisco report reveals 51% of Indian firms building data centers within a year as AI workloads surge, with 91% deploying autonomous AI agents amid security concerns.

"As much as 45% of Indian companies without this level of architectural foresight risk accumulating 'AI Infrastructure Debt' - Simon Miceli, Cisco"

Mumbai, Nov 12

Over half of Indian companies expect AI workloads to grow by more than 50 per cent in three to five years, with 51 per cent building new data‑centre capacity within 12 months, a report said on Wednesday.

The report by networking gear major Cisco noted that 91 per cent of Indian organisations are deploying autonomous AI agents, adding that only 37 per cent can properly secure them.

Globally, 13 per cent of organisations that have deployed artificial intelligence (AI) are outperforming peers by making fundamental infrastructure choices that create compounding advantages, the report added.

Calling such organisations "pacesetters", Cisco said that 97 per cent of global pacesetters have deployed AI at the scale and speed needed to unlock use cases and achieve ROI.

"They build network-first foundations, prioritize power infrastructure, optimise continuously, and embed security from day one," the report said.

"As much as 45 per cent of Indian companies without this level of architectural foresight risk accumulating 'AI Infrastructure Debt'," said Simon Miceli, Managing Director, Cloud and AI infrastructure, Asia Pacific, Japan and Greater China, Cisco.

This technical debt can compound into operational risk, security exposure, compliance challenges, and competitive disadvantage, the report noted.

Cisco identified four architectural choices that distinguished AL leaders as they prioritise continuous optimisation after deployment, treat the network as a foundation, estimate power early, and build security as infrastructure from day one.

While most respondents focus on compute, pacesetters prioritise network infrastructure, with 81 per cent of global Pacesetters rating their network as 'optimal' for AI workloads, the report noted.

"Pacesetters" are winning not because they spend more, but because they made architectural bets early--before workloads demanded them, before bottlenecks emerged, before security became urgent, the report said.

- IANS

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Reader Comments

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Rohit P
The security concerns are worrying though - only 37% can properly secure AI agents? We need to invest in cybersecurity training along with infrastructure. Can't have another data breach situation like we've seen in banking apps.
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Arjun K
Great to see Indian companies thinking ahead! The 'AI Infrastructure Debt' warning is crucial - we've seen what happens when companies rush into tech without proper planning. Hope our IT ministers are taking notes for policy making.
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Sarah B
Working for an MNC in Bangalore, I can confirm this trend. Our company just approved a massive budget for AI infrastructure. The network-first approach mentioned here is absolutely key - many companies overlook this and pay later.
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Vikram M
While this sounds promising, I hope smaller Indian companies don't get left behind. The cost of building data centers is enormous. Government should provide some support to MSMEs in this AI transition.
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Michael C
The power infrastructure point is critical for India. With our electricity challenges in many states, data centers need reliable power backup. Hope companies are considering solar and other renewable options too.

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