India AI suppliers cash in on data centre boom

Indian manufacturers are benefiting from the global artificial intelligence infrastructure buildout by supplying fibre-optic cables, power systems and cooling equipment for data centres.

The gains come even as investors worry India has not produced globally competitive AI models, remains dependent on imported advanced semiconductors and could see its $315 billion IT services industry disrupted by generative AI.

Sterlite Technologies, once known mainly as a telecoms network supplier, announced a $1.1 billion multi-year order from a US hyperscaler earlier this year. The company said the deal helped drive its shares up 400 percent this year.

Telecom equipment maker HFCL reported its strongest-ever April-June quarter, with revenue more than doubling on AI demand. Founder Mahendra Nahata told AFP the company is scaling production much more frequently than in the past.

The gains extend beyond fibre cables. TD Power Systems shares have risen 68 percent on expectations of demand from AI facilities, while MTAR Technologies has benefited from demand for power units used in fuel-cell systems serving big-tech operators.

Analysts warned that valuations have become stretched and that opposition to energy-intensive data-centre projects could pose risks. Data Center Watch, run by AI intelligence firm 10a Labs, says at least 75 US projects worth about $130 billion were delayed or blocked in the first quarter of 2026.

Indian executives said domestic demand could offset any slowdown abroad. India hosts nearly a fifth of the world's data but accounts for less than five percent of global data-centre capacity. An AFP review of funding announcements found US hyperscalers have committed about $57 billion in new Indian capacity over the past year, while Adani and Reliance have pledged $100 billion toward digital and infrastructure projects.