Larsen & Toubro (L&T) is banking on its billion-dollar push into data centres to yield significant returns, relying on its strategy of owning land, physical infrastructure, and servers to keep costs under control. The company believes full control over the entire setup will allow it to offer highly competitive pricing, even as demand for data centres rises amid the global surge in artificial intelligence adoption.
Prashant Jain, head of L&T’s corporate centre, said the company plans to scale its data centre capacity from 32 megawatts (MW) at present to 200MW by 2030. He emphasized that L&T’s “full stack” ownership enables it to reach large enterprises effectively, leveraging both its own data centre brand, Vyoma, and the longstanding client relationships of its technology subsidiaries, LTIMindtree and L&T Technology Services.
Analysts note that full control of operations, including strategic acquisitions, is essential in the capital-intensive data centre sector. L&T’s approach contrasts with other conglomerates such as Adani, Reliance, and Tata, which are also investing heavily in AI-ready infrastructure. By managing all stages internally, L&T expects to gain a cost advantage over its peers.
L&T recently began construction on a 40MW data centre in Navi Mumbai as part of its ₹10,000 crore ($1.2 billion) plan to reach 200MW capacity. In November, the company rebranded its cloud and data centre business as Vyoma, with plans to expand to 300MW over five years, potentially requiring $2.5–3 billion in investments.
Earlier, L&T acquired a 21% stake in IT infrastructure firm E2E Networks, which supplies servers for general and AI-specific data centres. This move is expected to reduce server acquisition costs for Vyoma. Jain added that the company is exploring options for renewable energy, aiming for 75% usage at its data centres.
While L&T’s $1.2 billion investment is smaller than some peers—Tata Consultancy Services plans a 1GW, $6.5 billion facility; Adani is investing $5 billion in a $15 billion AI data centre with Google; Reliance and Brookfield are developing a 1GW, $11 billion green-powered facility—it reflects a measured approach.
Experts say L&T’s model aligns with the expected strategy for large conglomerates in this sector. Naresh Singh, senior director at Gartner, highlighted that controlling land, power, and infrastructure is critical to success. Jayanth Kolla of Convergence Catalyst added that cost efficiency and execution will determine whether traditional conglomerates like L&T can thrive in digital-native businesses.
With existing experience in technology services and established enterprise networks, L&T and Tata are better positioned than some peers to expand in the data centre market. Reliance and Adani may leverage their AI-focused ventures, but execution and vision remain crucial to success in this fast-evolving field.
