L&T’s $1 B AI Data Centre Bet Pits It Against India’s Biggest Groups

Summary: Larsen & Toubro project signals big push into AI-ready data infrastructure against established rivals.

Larsen & Toubro (L&T) is placing a bold bet on its own engineering and services strengths to vie with India’s biggest conglomerates — Tata Group, Adani Group and Reliance Industries — in the fast-evolving market for AI-ready data centres.

The engineering giant has earmarked roughly $1 billion (about ₹8,500-10,000 crore) over the next few years to build data centres that can support artificial intelligence workloads, cloud computing and enterprise digital services. This investment comes as AI applications — from generative platforms to machine learning systems — place surging demand on high-capacity computing and storage infrastructure.

L&T’s strategy centres on using its long-standing strengths in design, construction and systems integration to deliver data infrastructure end-to-end. Industry insiders say the company’s belief is simple: if it can build and operate the facilities itself — instead of contracting out major parts — it can compete on cost, reliability and customisation.

The group has already started work on its first major facility in Navi Mumbai, a 40 megawatt (MW) campus that will be the first building block of a larger plan that could take total capacity to around 200 MW by 2030. For context, several of its bigger rivals have already announced far larger commitments — from Tata’s multi-gigawatt plans to Adani’s green-powered centres and Reliance’s global partnerships — but L&T believes its engineering pedigree and client base give it a fighting chance.

A core part of L&T’s pitch is that building facilities in-house will let it control quality and power efficiency, two areas that matter tremendously for AI workloads. These systems demand far more energy and cooling than legacy data centres, and even small inefficiencies can sharply increase operating costs. L&T executives have also said owning the full stack — from land and civil works to mechanical systems and server operations — will help them offer competitive pricing to customers seeking tailored solutions.

Tata Group’s data centre unit has already attracted substantial funding and global interest, with partners backing plans for gigawatt-scale capacity. Adani has been active through collaborations with international cloud and infrastructure partners, while Reliance’s projects — including planned AI campus builds — are among the largest in the region. Against this backdrop, L&T’s approach is seen as a differentiated play: instead of racing only on scale, it is leaning on in-house engineering capabilities and integrated services.

Industry analysts say the timing makes sense. India’s data centre market is expanding rapidly thanks to rising internet usage, cloud adoption, digital services, and AI deployments from enterprises large and small. Estimates suggest the country’s total installed capacity could more than double in the next few years, especially if corporates shift more of their workloads to local facilities to meet data-sovereignty needs.

But it won’t be without challenges. AI-ready infrastructure is expensive, power-hungry and technologically complex. Companies competing in this space must not only secure land, power and cooling solutions but also attract global customers who might otherwise turn to established hyperscale players. L&T’s success will depend on execution, strategic partnerships and how quickly it can build and fill its facilities.